DEF 14A 1 d185190ddef14a.htm DEF 14A DEF 14A

 

 

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  ¨

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¨   Preliminary Proxy Statement
¨   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x   Definitive Proxy Statement
¨   Definitive Additional Materials
¨   Soliciting Material Under §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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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, 2016
Time:   4:30 p.m. – 6:00 p.m.   Buffet Dinner & Fellowship
  6:00 p.m.   Business Meeting

The purposes of the meeting are:

 

  1. To elect nine (9) directors to one (1), two (2) or three (3) year terms;

 

  2. To ratify the appointment of Dixon Hughes Goodman LLP as the Company’s independent registered public accounting firm for 2016; 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.edocumentview.com/UWHR.

 

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

April 18, 2016


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, 2016, at 6:00 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 18, 2016 to shareholders of record as of March 10, 2016.

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 that 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 nine (9) 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 10, 2016 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 6,983,017 shares were outstanding on March 10, 2016. There were approximately 3,351 shareholders of the Company’s common stock on March 10, 2016.

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 designate from time to time. As of March 10, 2016, there were no shares of the Company’s preferred stock outstanding.

 

1


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 nine (9) nominees receiving the greatest number of votes shall be elected. In the case of Proposal 2, for such proposal to be approved, the number of votes cast in favor of the proposal 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, by mail, internet or 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 plans to adjourn the meeting at this time, but intends to do so, if needed, to promote shareholder interests.

 

2


Beneficial Ownership of Securities by Directors, Nominees and Executive Officers

As of March 31, 2016, no shareholder known to management beneficially owned more than 5% of the Company’s common stock.

The following table lists the individual beneficial ownership of the Company’s common stock as of March 31, 2016, by the Company’s current directors, nominees for director and named executive officers, and by all current directors, nominees, and executive officers of the Company as a group. Current directors, nominees and executive officers as a group beneficially owned 7.78% 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

     15,424 (3)      0.22   

Albemarle, NC

    

R. David Beaver, III

     14,208 (4)      0.20   

Albemarle, NC

    

Nadine B. Bowers

     33,149 (5)      0.47   

New London, NC

    

Joe S. Brooks

     31,026 (6)      0.44   

Albemarle, NC

    

Ronald T. Burleson

     19,624 (7)      0.28   

Richfield, NC

    

Bill C. Burnside

     13,391 (8)      0.19   

Albemarle, NC

    

James O. Campbell

     2,806 (9)      0.04   

Concord, NC

    

Raymond R. Cranford, Jr.

     5,396 (10)      0.08   

Albemarle, NC

    

Roger L. Dick

     221,998 (11)      3.18   

Albemarle, NC

    

Brendan P. Duffey

     54,339 (12)      0.78   

Harrisburg, NC

    

Tara G. Eudy

     1,406        0.02   

Peachland, NC

    

Charles F. (Tad) Geschickter, III

     1,419        0.02   

Stanfield, NC

    

Thomas M. Hearne, Jr.

     19,895        0.28   

Albemarle, NC

    

Charles D. Horne

     1,417        0.02   

Wadesboro, NC

    

 

3


Name and Address of Beneficial Owner

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

Harvey H. Leavitt, III

     3,493 (13)      0.05   

Wadesboro, NC

    

Samuel M. Leder

     1,861 (14)      0.03   

Concord, NC

    

W. Chester Lowder

     3,681 (15)      0.05   

Norwood, NC

    

Cynthia L. Mynatt

     3,136        0.04   

Concord, NC

    

James E. Nance

     40,360 (16)      0.58   

Albemarle, NC

    

Frank A. (Alex) Rankin, III

     19,830        0.28   

Concord, NC

    

S. Todd Swaringen

     1,560        0.02   

Norwood, NC

    

Dusty W. West

     33,861 (17)      0.48   

Mount Gilead, NC

    

All current directors, nominees

     543,280        7.78   

and executive officers as a group

    

(22 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 6,981,817 shares outstanding on March 31, 2016. As of such date, none of the identified individuals owned any stock options entitling the option holder to acquire shares of Company common stock.
(2) Includes shares over which the named individual shares voting and investment power as follows: Mr. Beaver – 6,654 shares; Mr. Brooks – 15,839 shares; Dr. Burnside – 12,338 shares; Mr. Duffey – 1,134 shares; Mr. Geschickter – 1,419 shares; Mr. Leder – 251 shares; Mr. Lowder – 2,375 shares; Mr. Nance – 13,168 shares; and Mr. West – 27,283 shares.
(3) Includes 1,101 shares held by Dr. Aldridge as custodian for minor child and 9,987 shares held by Dr. Aldridge’s mother, for whom Dr. Aldridge holds Power of Attorney.
(4) Includes 4,378 shares held by the Uwharrie Capital Corp Supplemental Executive Retirement Plan for the benefit of R. David Beaver, III, with respect to which John R. Morgan serves as trustee.
(5)  Includes 10,717 shares held by Mrs. Bowers’ spouse.
(6)  Includes 339 shares held by Mr. Brooks’ adult child.
(7)  Includes 972 shares held by Mr. Burleson’s spouse.
(8)  Includes 500 shares held by Dr. Burnside’s spouse.
(9)  Includes 251 shares held by Mr. Campbell as executor for his mother.

 

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(10)  Includes 604 shares held by Mr. Cranford as custodian for his daughter.
(11) Includes 157,022 shares held by the Uwharrie Capital Corp Supplemental Executive Retirement Plan for the benefit of Roger L. Dick, with respect to which John R. Morgan serves as trustee.
(12) Includes 40,292 shares held by the Uwharrie Capital Corp Supplemental Executive Retirement Plan for the benefit of Brendan P. Duffey, with respect to which John R. Morgan serves as trustee.
(13) Includes 174 shares held by Mr. Leavitt’s spouse.
(14)  Includes 125 shares held by Mr. Leder as custodian for son.
(15)  Includes 692 shares held by Mr. Lowder’s adult child.
(16) Includes 13,524 shares held by Mr. Nance as custodian for his daughters and 6,762 shares owned by Mr. Nance’s spouse.
(17)  Includes 2,168 shares held by Mr. West’s sons.

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 were timely filed during the fiscal year ended December 31, 2015.

 

5


PROPOSAL 1: ELECTION OF DIRECTORS

Nominees

The Company’s Bylaws currently provide for a Board of Directors composed of not less than twelve (12) nor more than twenty-one (21) members divided into three classes of directors who are elected to staggered terms of three (3) years. The Board of Directors has set the number of directorships for the Annual Meeting at eighteen (18). The Board of Directors has nominated the nine (9) persons named in the following table for election by shareholders at the Annual Meeting as directors of the Company, each to serve for the term of office indicated or otherwise until their respective successors are duly elected and qualified.

 

Name and Age

  

Length
of

Term

  

Position
with
Company

  

Year

First Elected

  

Principal Occupation

and Business Experience

for the Past Five Years

James O. Campbell

(59)

   2 years    Director    2011    Vice President of Construction Sales, AvidXchange, Inc., Charlotte, NC (a provider of on-demand accounts payable management and automated payment solutions)

Raymond R. Cranford, Jr.

(61)

   3 years    Director    2007    Owner and Vice President of Sales, Crook Motor Co., Inc., Albemarle, NC

Thomas M. Hearne, Jr.

(65)

   3 years    Director    2004    Retired; previously, Geopavement Engineer, North Carolina Department of Transportation, Harrisburg, NC

Samuel M. Leder

(48)

   2 years    Director    2011    Certified Public Accountant/Partner, Potter & Company, P.A., Concord, NC

Harvey H. Leavitt, III

(57)

   3 years    Director    2007    Owner/Operator, Leavitt Funeral Home, Wadesboro, NC

Cynthia L. Mynatt

(60)

   3 years    Director    2003    President, Ben Mynatt Buick – GMC, Concord, NC

James E. Nance

(64)

   3 years    Director    1984    Founder and Managing Member, North State Acquisitions, LLC and North State Negotiations, LLC (real estate firms specializing in right of way negotiations and claims settlements)

Frank A. (Alex) Rankin, III

(60)

   1 year    Director    2003    President and Owner, Concord Engineering & Surveying, Inc., Concord, NC

S. Todd Swaringen

(39)

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

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

 

6


Incumbent Directors

The Company’s current Board of Directors includes nine (9) directors whose terms will continue after the Annual Meeting. The following table contains information about those nine (9) incumbent directors.

 

Name and Age

  

Current
Term
Expires

  

Year
First
Elected

  

Principal Occupation

and Business Experience

for the Past Five Years

W. Stephen Aldridge, III

(42)

   2018    2009   

President/Funeral Director, Stanly Funeral

Home, Inc., Albemarle, NC

Nadine B. Bowers    2018    2007    Retired; previously, Senior Vice President,
(75)          Uwharrie Investment Advisors, Inc. (f/k/a
         Strategic Investment Advisors, Inc.), and
         Uwharrie Bank (f/k/a Bank of Stanly)
Joe S. Brooks    2017    1997    Owner and Manager, Brothers Precision
(66)          Tool Co., Albemarle, NC
         (tool and die machine shop)
Ronald T. Burleson    2017    1997    Partner, Thurman Burleson & Sons Farm,
(66)          Richfield, NC (cotton and grain farming
         operation; partner in cotton gin)
Bill C. Burnside    2018    1998    Retired; previously, Dentist/Sole Proprietor,
(66)          Bill C. Burnside, DDS, Albemarle, NC
Tara G. Eudy    2018    2005    President and Treasurer, Carolina Title
(49)          Company, Inc., Wadesboro, NC
Charles F. (“Tad”) Geschickter, III    2017    2005    President and Chief Executive Officer,
(53)          JTG Racing, Inc.; ST Motorsports, Inc.,
         Harrisburg, NC
W. Chester Lowder    2017    1995    Director of Livestock Program,
(67)          Public Policy Division, NC Farm
         Bureau Federation, Incorporated,
         Raleigh, NC
Dusty W. West    2017    1989    President and Owner, Dean’s Ready Mixed,
(63)          Inc., Albemarle, NC (concrete business)

In the tables above, the year first elected indicates the year in which each individual was first elected a director of the former Bank of Stanly, Anson Bank & Trust Co., Cabarrus Bank & Trust Company or the Company, as applicable, and does not reflect any break(s) in tenure. On September 1, 2013, Bank of Stanly, Anson Bank & Trust Co., and Cabarrus Bank & Trust Company consolidated under the name of Uwharrie Bank.

 

7


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. Each of the Company’s directors also serves as a director of the Company’s subsidiary, Uwharrie Bank.

W. Stephen Aldridge, III, Ph.D.

Dr. 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.

Dr. 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.

Dr. Aldridge holds numerous leadership positions in the community including service 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 former member of the Albemarle Rotary Club. He also served on the Board of the Albemarle Rotary Club and as Chairman of the Stanly County Chamber of Commerce in 2007 and was appointed by NC Governor Beverly Perdue to a three-year appointment on the NC Board of Funeral Service in January of 2012 and was reappointed by Governor Pat McCrory to a second three year term in 2015. He currently serves on the Board of Directors for Stanly County Hospice.

He has attended multiple sessions of the North Carolina Bank Directors’ College and North Carolina Advanced Bank Directors’ College. He has extensive experience in small business management and civic involvement in Stanly County.

Dr. Aldridge has served as a member of the Uwharrie Capital Corp Board since 2009. He serves on the Audit Committee.

Nadine B. Bowers

Mrs. Bowers is a former Senior Vice President of both Uwharrie Investment Advisors, Inc. (formerly known as Strategic Investment Advisors, Inc.), a wholly-owned subsidiary of the Company, and Uwharrie Bank (formerly known as Bank of Stanly). She is now retired. Uwharrie Investment Advisors was incorporated in 1998 and is an SEC-registered investment adviser that provides investment advisory and asset management services.

Mrs. Bowers is a graduate of Kings Business College, Charlotte, NC. She has twenty-one years of banking experience and five years of investment management experience, previously holding Medicare Supplement/Long Term Care, Life/Accident/Health, securities licenses Series 7, Series 63 and Series 65. Prior to her banking experience, she was a stay at home wife, mother, community volunteer and substitute teacher. She also has prior work experience with Collins & Aikman Corporation and Southern Bell Telephone.

 

8


Mrs. Bowers has extensive community involvement and currently serves with the Stanly Regional Medical Center Advisory Board, the Auxiliary and its Foundation Board’s Stanly Society. She also serves with Meals-On-Wheels, Xi Alpha Nu sorority, Daughters of the American Revolution (DAR), Stanly Community College Board of Trustees, serving as Chairwoman, and Stanly Community College Foundation Board. Additionally, she was recently appointed to the North Carolina State Community College Board of Trustees. She is also an active member of Salem United Methodist Church in Albemarle. Previously, Mrs. Bowers served with the Pfeiffer University Friends of the Library, Stanly County YMCA Board and American Red Cross Board.

Mrs. Bowers has extensive banking and investment services experience and civic involvement.

Mrs. Bowers was appointed to the Company Board in November of 2014 to fill a previous director’s unexpired term.

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 employees 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 has 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 its 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 also served a previous six-year term beginning in 1997. He is also past Board Vice Chairman and past Chairman of the Audit Committee, Human Resources Committee, and Properties Committee. He currently serves as Vice Chairman of the Uwharrie Capital Corp Board and member of the Audit Committee.

In 2014, he was appointed by the North Carolina State Governor to the Stanly Community College Board of Trustees for a three-year term.

 

9


Ronald T. Burleson

Mr. Burleson is an employee and partner of the family business, Thurman Burleson & Sons Farm, a cotton and grain farming operation in 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 also served a previous six-year term beginning in 1997. He serves on the Audit Committee.

Bill C. Burnside, D.D.S.

Dr. Burnside owned and operated a private dental practice in Albemarle, NC from 1978 to May 2013, at which time the practice was sold. He has been retired since that time, but works one day a week at the Dental Clinic in the local Stanly County Health Department. 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 served as a dentist at the Air Guard base in Charlotte, NC. He retired in May 2012 at the rank of Lieutenant Colonel, after serving as the Chief of Dental Services for most of the 20 years.

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 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.

 

10


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 Audit Committee.

James O. Campbell

Mr. Campbell is a native of Concord, NC, graduating from Concord High School and the University of North Carolina – Chapel Hill where he received a Bachelor of Science in Business Administration. He began his professional career in 1979 with Timberline Software Corporation (NASDAQ: TMBS), a developer of application software for the construction and real estate industries, and was appointed Vice President of Sales in 1996. The company was purchased in 2003 by Sage Software, and Mr. Campbell continued in his senior management role there until 2005, when he became President of CIS Consulting Group, Inc. in Charlotte, NC. In 2010, CIS was acquired by Viewpoint Construction Software, where he was employed as Channel Sales Manager. In 2016, Mr. Campbell joined AvidXchange, Inc., a provider of on-demand accounts payable management and automated payment solutions, as Vice President of Construction Sales in Charlotte, NC.

Mr. Campbell is a Lifetime Honorary Board member of the Boys and Girls Club of Cabarrus County, having served in several leadership capacities there and at his church, Central United Methodist in Concord, NC.

Mr. Campbell has extensive experience in the technology industry and in business management.

Mr. Campbell previously served on the Company’s former subsidiary Cabarrus Bank & Trust Company Board of Directors. He serves on the Audit Committee.

Raymond R. (“Rudy”) Cranford, Jr.

Mr. Cranford is an owner and Vice President of Sales for Crook Motor Co., Inc., a new and used truck sales company in Albemarle, NC. He started working with Crook Motor Co. in 1986 as a salesman. He later assumed the sales manager role, and in 1999 became a partial owner in the company. He has bought and sold quality used trucks throughout the United States. The company is also a new truck dealer selling new Western Star trucks.

He is a graduate of North Carolina State University with a degree in Soil Technology and is a member of the Farm House Fraternity. Since 2003, he has served on the Albemarle Downtown Development Corporation’s Outdoorsman’s Bonanza Committee for the betterment of downtown Albemarle. He served on the former Bank of Stanly Board of Directors from 2007 to 2013, serving as Vice Chairman for one year and Chairman for two years. Mr. Cranford is also an active member of First Lutheran Church in Albemarle.

Mr. Cranford has extensive experience in business management and sales.

 

11


Tara G. Eudy

Mrs. Eudy is co-owner and President of Carolina Title Company, Inc., Wadesboro, North Carolina, which is an issuing agency providing title insurance policies for both residential and commercial transactions. Carolina Title has been a locally-owned and operated independent agency since its inception in 1995 and is an issuing agent for three national underwriters: Chicago Title Insurance Company, First American and Commonwealth Land Title in North Carolina and Chicago Title in South Carolina.

Mrs. Eudy is a Certified Paralegal, a North Carolina Title Insurance Underwriter, and a member of the North Carolina Bar Association Real Property Section. She serves as Real Property Secretary of the North Carolina State Bar Council Board. Mrs. Eudy serves on the North Carolina Land Title Association Board and is treasurer, past secretary and Vice Chairwoman. She is also active in the Friends of Scouting Campaign Committee for Anson County, having served as its Chairwoman for two years. She previously served on the Anson County Chamber of Commerce Board, where she served as past Chairwoman, and the Anson County Hospital Foundation Board. She has also coached girls’ softball with Anson Parks & Recreation for numerous years.

Mrs. Eudy has extensive experience in business management.

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 20 years. The company employs 49 employees. 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 Procter & 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.

Thomas M. Hearne, Jr.

Mr. Hearne is a retired geopavement engineer from the North Carolina Department of Transportation with 30 years of service.

 

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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 and is the inventor of a device used in North Carolina to test ride quality and smoothness of asphalt pavements during construction. He has extensive experience in structural testing and evaluation of highway pavements and has 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 two estate funds for First Lutheran Church and also serves as a Sunday school teacher at Trinity Place in Albemarle. He is a member of the Board of Trustees of Stanly Community College, The Citadel Alumni Association, and the American Society of Civil Engineers.

Mr. Hearne has extensive experience in small business management and civic involvement in Stanly County.

Mr. Hearne serves on the Audit Committee.

Samuel M. Leder

Mr. Leder is a partner with Potter & Company, PA, Certified Public Accountants, Concord, NC, where he has worked since 1995. The firm has offices in Monroe, Concord, Mooresville and Charlotte. He is the partner in charge of the Concord office. Prior to joining Potter & Company, Mr. Leder was an accountant with Butler & Stowe, Certified Public Accountants and Assistant Controller with Colter Bay International. In his accounting practice, Mr. Leder’s industry experience includes audit, financial reporting, tax, compliance and related accounting services to the not-for-profit, construction, service organizations, manufacturing and distribution and governmental markets.

Mr. Leder is a member of the North Carolina Association of Certified Public Accountants, the American Institute of Certified Public Accountants, and the Cabarrus Regional Chamber of Commerce, on which he served on the Board of Directors from 2005 to 2012 and as Board Chair in 2010. He was previously President of the Concord Rotary Club and served as Treasurer for the Carolina International School Board of Directors from 2008 to 2015. Mr. Leder currently serves as Treasurer for the Ella Foard Foundation for Rett Syndrome and as an Advisory Board Member for Carolinas HealthCare System NorthEast in Concord. Mr. Leder is a current member of the Concord City Council. He earned a Bachelor of Science in Business Administration and Masters of Accounting from the University of North Carolina, Chapel Hill, NC.

He has extensive experience in public accounting and business management and civic involvement in Cabarrus County.

Mr. Leder previously served on the Company’s former subsidiary Cabarrus Bank & Trust Company Board of Directors. He serves on the Audit Committee.

 

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Harvey H. Leavitt, III

Mr. Leavitt is the owner and operator of Leavitt Funeral Home in Wadesboro, NC. A third generation funeral director, he joined the business in 1982 as a licensed professional and purchased the business from his father in 1988. In 1997, he added a cemetery, Anson Memorial Park, to the business operations. In 2003, Mr. Leavitt partnered with several local businessmen to open a new adult care facility, Meadowview Terrace Assisted Living.

He has a business degree from the University of North Carolina at Chapel Hill and a degree in funeral service from Gupton-Jones College in Atlanta, GA. Professionally, he has served as President of both the NC Board of Funeral Service and the NC Funeral Directors’ Association. He currently serves on the American Board of Funeral Service Education as a member of their accreditation team as they accredit funeral service education programs across the United States.

Mr. Leavitt has served on a number of local community boards and organizations including the Anson County Chamber of Commerce, Uptown Wadesboro Inc., the South Piedmont Community College Board of Trustees, the South Piedmont Community College Foundation Board, the Lillie Bennett Charitable Trust, the Anson Community Hospital Foundation, and the Central NC Council for the Boy Scouts of America. He is a longtime member of First United Methodist Church, Wadesboro, NC.

He served on the Anson Bank & Trust board from 2007 until 2013 when the bank consolidated into Uwharrie Bank and has continued to serve on the subsidiary bank board since its inception.

Mr. Leavitt has extensive experience in small business management and regulation.

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

 

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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 extensive experience as a member of the Uwharrie Capital Corp Board, dating back to 1995. He serves as Chairman of the Board of Directors. He also serves on the subsidiary bank Board of Uwharrie Bank, and as its Chairman.

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 160 employees.

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 on 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, formerly serving as President 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, the Greater Charlotte Automobile Dealers Association Board of Directors, and the Charlotte Buick-GMC Local Marketing Association’s Board of Directors, serving as President. She has received numerous business awards for her professional achievements.

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

 

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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 on the Uwharrie Capital Corp Board since November of 2010.

James E. Nance

Mr. Nance served as Dealer Operator and President for Confederate Motors, Inc. which was a Chevrolet franchised dealership during his tenure with the family operated business from 1973 until the sale of the business in 2007. In 2008 he started North State Acquisitions, LLC and North State Negotiations, LLC which are real estate firms specializing in right of way negotiations and claim settlements.

Mr. Nance is a graduate of the University of North Carolina at Chapel Hill with a B.S. in Business Administration. He also is a licensed Real Estate Broker and Broker in Charge in the State of North Carolina.

He currently serves on the Board of Trustees of Stanly Community College where he is Chairman of the Finance Committee, Board of Directors of the North Carolina Housing Finance Agency where he is the Vice-Chairman, Board of Directors of the North Carolina Railroad Company where he is Chairman of the Strategic Planning and Economic Development Committee, Board of Visitors of the University of North Carolina at Chapel Hill, Advisory Committee for the Central N.C. Council Boy Scouts of America, Member of the Eagle Scout Board of Review for the Stanly District, and a Member of Central United Methodist Church.

He previously served as Vice Chairman and Member of the North Carolina Board of Transportation, Vice Chairman of the Stanly County Economic Development Commission, Member of the Stanly County Airport Authority, Administrative Board of Central United Methodist Church, Board of Trustees of Pfeiffer University, Board of Directors of Stanly County ARC Services, Inc., Co-Chairman of the North Carolina Automobile Dealers Association Legislative Committee, and Board of Directors of the North Carolina Citizens for Business and Industry.

Mr. Nance is an Eagle Scout and also a recipient of the Silver Beaver Award from the Central North Carolina Council of the Boy Scouts of America.

He has extensive experience in business management, state and federal governmental relations, transportation, and education.

He is an original incorporator of Bank of Stanly (now known as Uwharrie Bank) and has served on the Board of Directors of Bank of Stanly and Uwharrie Capital Corp where he served as Chairman of both organizations. He also served as Vice Chairman of the Board of The Strategic Alliance Corporation, Inc.

 

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Frank A. (Alex) Rankin, III

Mr. Rankin has almost 40 years of experience working both in civil engineering and in land surveying within the land development services industry. Mr. Rankin was the first employee of Concord Engineering & Surveying, Inc. (CESI), starting part-time with the newly chartered firm in 1978. As the firm grew, Mr. Rankin was quickly exposed to aspects of many types of surveying, and was able to hone his civil engineering skills based on in-the-field experiences working with contractors to build sites designed by both CESI and others.

In 1983, Mr. Rankin became an equity owner of the firm and was given the role of Vice-President, while at the same time continuing to actively supervise surveying and civil engineering projects. Mr. Rankin became President in 1998 and began to concentrate on management and administrative duties.

Mr. Rankin is a life-long resident of Cabarrus County and has been active in many community issues during his professional career. Mr. Rankin is a past Chair of the Cabarrus Regional Chamber of Commerce, a past Chair of the Coltrane Life Center, a founder and past Chair of Cabarrus Bank & Trust, on the initial board of Uwharrie Bank, a past Chair of the Concord Rotary Club, he has served on the Cabarrus Board of Health, served on the Board of Directors for the North Carolina Society of Surveyors, has twice been President of the Concord Downtown Development Corporation Board, served from 2001 until 2015 on the North Carolina Workforce Development Commission, was elected in 2015 as Chair of the Governing Board of the Carolina Thread Trail, is a Senior Fellow of the American Leadership Forum, was appointed in June, 2008 to the North Carolina Land Records Advisory Committee of the NC Secretary of State, and was appointed July, 2011 to the NC Geographic Information Coordinating Council, along with service to many other organizations.

Mr. Rankin earned a Bachelor of Science in Biological and Agricultural Engineering from North Carolina State University, Raleigh, NC. He holds Professional Engineer and Professional Land Surveyor registrations in numerous states.

Mr. Rankin has extensive experience in small business management and civic involvement in Cabarrus County.

Mr. Rankin previously served on the Company’s former subsidiary Cabarrus Bank & Trust Company Board of Directors.

S. Todd Swaringen

Mr. Swaringen is a certified public accountant and partner with Beane Swaringen & Company, PLLC, Albemarle, NC. 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, five of whom are certified public accountants.

 

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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, past Chairman of the Stanly Regional Medical Center Foundation Board, and member of the Albemarle Rotary Club. He is past Chairman of the United Way of Stanly County Board of Directors. He currently serves as a member of the Stanly Community College Board of Trustees and the Stanly County Schools Board of Education. 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 as Chairman of the Audit Committee, designated as the financial expert.

Dusty W. West

Mr. West is President and Owner of Dean’s Ready Mixed, Inc. in Albemarle, NC. A native of Stanly County, he has worked in the family business since 1972. He has formerly been very active on the Stanly County Family YMCA Board of Directors for many years.

Mr. West has extensive experience in all areas of business management.

He has numerous years of experience on the former Bank of Stanly board and the holding company board, having served in the Board Chairman and Vice Chairman roles. He also has extensive experience on the Bank’s loan 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 for comparable transactions.

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.

 

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Meetings and Committees of the Board of Directors

The Board of Directors of the Company held nine (9) regular meetings during 2015. 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 Dr. Aldridge, Messrs. Geschickter, Horne and Moose and Ms. Mynatt, each of whom attended fewer than 75% of such meetings due to prior business commitments.

It is the policy of the Company that directors attend each annual meeting and any special meetings of the Company’s shareholders. Fourteen (14) of the Company’s sixteen (16) directors then in office attended the 2015 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 Audit Committee. During 2015, the full Board of Directors served as the Human Resources & Compensation Committee and as the Nominating Committee.

Human Resources & Compensation Committee. The full Board of Directors currently serves as the Human Resources & Compensation Committee. 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 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. During 2015, the entire Board of Directors served as the Human Resources & Compensation Committee and therefore the committee did not meet independently.

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. The Human Resources & Compensation Committee has adopted a formal charter, which is included as Exhibit A to this proxy statement.

 

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Nominating Committee. The full Board of Directors currently serves as the Nominating Committee. All members of the Nominating Committee are independent directors. The full board recommended the nine (9) nominees for election to the Board of Directors at the Annual Meeting. During 2015, the entire Board of Directors served as the Nominating Committee and therefore the committee did not meet independently.

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 persons with varied expertise who represent the different 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.

Nominations for election to the Board of Directors by shareholders for the 2017 annual meeting should be submitted in writing to the Chief Executive Officer, President or Secretary of the Company by December 1, 2016, 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 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 B to this proxy statement.

Audit Committee. The audit committee is a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The current members of the Audit Committee are S. Todd Swaringen – Chairman, W. Stephen Aldridge, III, Joe S. Brooks, Ronald T. Burleson, Bill C. Burnside, James O. Campbell, Thomas M. Hearne, Jr., Charles D. Horne, and Samuel M. Leder. The members of the Audit Committee are “financially literate” under applicable standards and, with the exception of Mr. Swaringen, each member of the Audit Committee is “independent” 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 (“GAAP”) 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 present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the reporting company’s financial statements, or experience actively supervising people engaged in such activities; (iv) an understanding of internal control over financial reporting; and (v) an understanding of audit committee functions.

The Audit Committee met four (4) times during 2015. The Report of the Audit Committee is included on page 29 of this proxy statement. The Audit Committee has adopted a formal charter, which is included as Exhibit C to this proxy statement.

 

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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 framework 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 Audit Committee and the Human Resources & Compensation Committee, as described above, as well as through other committees, including the Credit Committee, the Senior Risk Management Committee, and the Enterprise Risk Management (“ERM”) Committee.

During 2010, the Company established the ERM Committee of the Board of Directors and the Senior Risk Management Committee (internal management). The ERM 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. In 2014, the full Board assumed the responsibilities of the ERM Committee. In addition to the Board, the Company’s Chief Executive Officer, Chief Risk Officer, Chief Operating Officer and Chief Financial Officer are members of the ERM Committee. The Company has also established the 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 Directors’ ERM 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 and interest rates, and reputation.

Given the important role of information technology in the Company’s operations and customer service, the Senior Risk Management Committee members include associates from the Technology department. Significant strategic information technology initiatives or changes, including security risks, are brought to this committee. Minutes of this committee are reported to the Uwharrie Capital Corp Board.

Information security is the process by which an organization protects and secures its systems, media, and facilities that process and maintain 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.

 

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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 Credit Committee is 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 Credit Committee’s authority, along with insider loans, are recommended for approval to the Board of Directors of Uwharrie Bank for further action. The Credit 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, the Credit Committee reviews exceptions for policy, documentation and loan-to-value along with loan concentration reports and allowance of loan losses and lease methodology and quarterly calculations. The Credit Committee reports its activities in detail to the Bank’s Board of Directors monthly.

The Credit Committee reviews and approves loan requests for relationships that exceed $500,000 in exposure for structure and repayment terms, underwriting, collateral, and risk grading. The Credit Committee also reviews annual loan reviews prepared by Credit Administration for loan relationships with exposure of $1 million and greater. The Credit Committee 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 Uwharrie Bank.

Director Compensation

During 2015, each director received a fee of $200 for each Board of Directors meeting attended and $100 for attendance at each meeting of a committee. Members of the Audit Committee were paid $100 per hour for Audit Committee meetings attended due to the additional time required. Directors also received an allowance for travel associated with their attendance at meetings of the Board of Directors and its committees. 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, 2015.

 

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DIRECTOR COMPENSATION TABLE

 

Name

   Fees Earned
or

Paid in Cash
     Stock
Awards
     Option
Awards
     All Other
Compensation(1)
     Total  

W. Stephen Aldridge, III

   $ 1,400         —           —         $ 60       $ 1,460   

Nadine B. Bowers

     1,400         —           —           20         1,420   

Joe S. Brooks

     2,500         —           —           70         2,570   

Ronald T. Burleson

     2,100         —           —           90         2,190   

Bill C. Burnside

     2,300         —           —           100         2,400   

James O. Campbell(2)

     200         —           —           0         200   

Raymond R. Cranford, Jr.

     1,400         —           —           60         1,460   

Tara G. Eudy

     1,200         —           —           45         1,245   

Charles F. Geschickter, III

     800         —           —           40         840   

Thomas M. Hearne, Jr.

     1,800         —           —           80         1,880   

Charles D. Horne

     1,600         —           —           180         1,780   

W. Kenneth Huntley(3)

     400         —           —           90         490   

Harvey H. Leavitt, III(2)

     200         —           —           0         200   

Samuel M. Leder(2)

     200         —           —           0         200   

Lee Roy Lookabill, Jr.(3)

     400         —           —           90         490   

W. Chester Lowder

     2,200         —           —           60         2,260   

Barry S. Moose(4)

     200         —           —           30         230   

Cynthia L. Mynatt

     1,000         —           —           30         1,030   

James E. Nance

     1,600         —           —           70         1,670   

Frank A. (Alex) Rankin, III(5)

     200         —           —           0         200   

S. Todd Swaringen

     2,300         —           —           70         2,370   

Edward B. Tyson(3)

     400         —           —           60         460   

Dusty W. West

     1,600         —           —           70         1,670   

 

(1) Consists of a travel allowance for attendance at Board of Directors and committee meetings.
(2) James O. Campbell, Harvey H. Leavitt, III and Samuel M. Leder were appointed to the Board of Directors on November 17, 2015, to fill vacancies created by an increase in the size of the Board of Directors from 16 to 19 members.
(3) Term on the Board of Directors ended on May 12, 2015.
(4) Barry S. Moose resigned from the Board of Directors effective November 17, 2015.
(5) Frank A. (Alex) Rankin, III was appointed to the Board of Directors November 17, 2015, to fill the unexpired term of Barry S. Moose.

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

(64)

   President and Chief Executive Officer, Uwharrie Capital Corp; Chief Executive Officer, Uwharrie Bank    1983

Brendan P. Duffey

(67)

   Chief Operating Officer, Chief Risk Officer and Executive Vice President, Uwharrie Capital Corp; President, Uwharrie Bank    2004

R. David Beaver, III

(33)

   Chief Financial Officer, Uwharrie Capital Corp and Uwharrie Bank    2005

 

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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, and R. David Beaver, III (the “Named Executive Officers”) for services rendered in all capacities during the fiscal years ended December 31, 2015 and 2014. 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, 2015 and 2014.

SUMMARY COMPENSATION TABLE

 

Name and Principal Position

   Year      Salary(1)      Bonus      Stock
Awards
     Non-Equity
Incentive Plan
Compensation
     Nonqualified
Deferred
Compensation
Earnings
     All Other
Compensation(2)
     Total  

Roger L. Dick,

     2015       $ 248,455       $ 25,000         —         $ 4,969       $ 125,000       $ 20,507       $ 423,931   

President and Chief Executive

     2014         248,455         20,000         —           4,969         125,000         25,984         424,408   

Officer of the Company;

                       

Chief Executive Officer of the Bank

                       

Brendan P. Duffey,

     2015         226,685         22,500         —           4,534         98,500         20,890         373,109   

Chief Operating Officer,

     2014         226,685         20,000         —           4,534         98,500         23,596         373,315   

Chief Risk Officer and Executive

                       

Vice President of the Company;

                       

President of the Bank

                       

R. David Beaver, III,

     2015         165,000         —           —           3,300         15,000         30,229         213,529   

Chief Financial Officer

     2014         130,000         —           —           2,600         —           14,812         147,412   

of the Company and Bank

                       

 

(1) Includes amounts deferred at the officers’ election pursuant to the Company’s 401(k) Plan.
(2) 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 included are Company contributions allocated to each of the officers under the Company’s Employee Stock Ownership Plan during 2014 prior to the termination of the Employee Stock Ownership Plan and, to the extent applicable, payments made pursuant to commission or revenue sharing arrangements. For Mr. Beaver in 2015, this amount also includes $10,000 in compensation associated with the purchase of shares of the Company’s common stock for Mr. Beaver’s benefit under the 2015 Stock Grant Plan.

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 161,232 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.

 

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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 107,405 shares of the Company’s common stock upon the exercise of purchase options meeting the qualifications of Section 423 of the Internal Revenue Code.

The Company has not adopted any plan providing for the grant of restricted stock or long-term compensation units.

Outstanding Equity Awards at Fiscal Year-End

No incentive stock options or purchase options were granted to the Named Executive Officers during 2015 or 2014. As of December 31, 2015, there were no vested or unvested incentive stock options to purchase shares of the Company’s common stock held by any of the Named Executive Officers.

Mr. Beaver received a grant of 3,310 shares of common stock in 2015 under the Company’s 2015 Stock Grant Plan. All of these shares were vested as of December 31, 2015.

2015 Stock Grant Plan

In 2015, the Board of Directors approved the Uwharrie Capital Corp 2015 Stock Grant Plan. The plan allows the Company or its subsidiaries to make grants of the Company’s common stock to employees, directors or independent contractors of the Company or its subsidiaries as an alternate form of compensation or as a performance bonus. The purpose of the Plan is to advance the interests of the Company and its shareholders by enabling participants to acquire a proprietary interest in the Company by ownership of its common stock and to keep personnel of experience and ability in the employ of the Company or its subsidiaries and to compensate them for their contributions to the Company or its subsidiaries and thereby induce them to continue to make such contributions in the future.

The Company’s Chief Executive Officer has discretion as to whom to award stock grants as well as the amount and frequency of the grants. The Chief Executive Officer’s decisions are subject to the approval of the Board of Directors. The Board of Directors has full and final authority to construe and interpret the plan and to make all other determinations and take all other actions deemed necessary or advisable for the proper administration of the plan.

The shares of common stock used for grants under the plan are outstanding shares purchased by a revocable trust formed by the Company. The trust retains legal ownership of all shares purchased for the benefit of participants until such time as the transfer of shares to the participant is completed; however, the participant is 100% vested in the shares purchased on his or her behalf as soon as the trust’s purchase of shares has been completed. Participants receive stock grants in the form of shares of common stock in a single or proportional award, as soon as administratively feasible following each purchase of shares for such participant, but no later than the last business day of December in the year of grant. Shares that are transferred to a participant

 

25


result in taxable income for the participant. The amount of taxable income is based on the price of the shares when they are purchased for the participant. These amounts are subject to required income tax and employment tax withholdings.

In the event that the Board of Directors determines, in its sole discretion, that any stock dividend, stock split, reverse stock split, reclassification, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, warrants or rights offering, or other similar transaction affects the common stock such that an adjustment is required in order to preserve the benefits or potential benefits intended to be granted or made available under the plan to the participants, the Board of Directors has the right to proportionately and appropriately adjust stock grants.

The Board of Directors may alter, suspend, or terminate the plan at any time. No stock grants may be granted during any suspension or after the termination of the plan. No amendment, suspension, or termination of the plan will, without a participant’s consent, alter or impair any of the rights or obligations under any outstanding stock grant unless such alteration is required in order to comply with applicable law.

All costs and expenses incurred in the operation and administration of this plan are borne by the Company.

Employee Stock Ownership Plan

The Uwharrie Capital Corp Employee Stock Ownership Plan and Trust (“ESOP”) became effective on January 1, 1999 and the Company terminated the ESOP and distributed plan assets to the ESOP participants in 2014.

Supplemental Executive Retirement Plan

The Company has implemented a non-qualified 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 or separation from service under certain circumstances.

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 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 the terms of the agreement, the Company has reserved the absolute right, at its sole discretion, to either fund or refrain from funding the plan.

 

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PENSION BENEFITS

 

Name

  

Plan Name

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

Roger L. Dick

   Supplemental Executive Retirement Plan   32   $ 1,309,604      -0-

Brendan P. Duffey

   Supplemental Executive Retirement Plan   11   $ 1,012,964      -0-

R. David Beaver, III

   Supplemental Executive Retirement Plan   1   $ 16,399      -0-

Split-Dollar Life Insurance Agreements

The Company has purchased life insurance policies on certain of its executive officers. The Company has entered into an Endorsement Method Split-Dollar Plan Agreements (the “Split-Dollar Agreements”) with Roger L. Dick. Under the terms of the Split-Dollar Agreements, the proceeds from the policy are divided between the Company and the executive’s designated beneficiary with the executive’s designated beneficiary receiving up to 85% of the difference between the total proceeds of the policy and the policy’s cash value. The Company has also provided a term life insurance policy on Brendan P. Duffey. As of December 31, 2015, the survivor’s benefit for the named beneficiaries of Mr. Dick and Mr. Duffey under these life insurance policies was $2,208,894 and $1,000,000 respectively.

Change in Control Severance Agreement

The Company entered into a Change in Control Severance Agreement with R. David Beaver, effective as of January 1, 2015. Under the agreement, Mr. Beaver is entitled to certain severance benefits if his employment is terminated under certain circumstances that would constitute a “covered termination” under the agreement. A covered termination means (i) Mr. Beaver’s dismissal or discharge for reasons other than “cause” (as defined in the agreement), death or disability or (ii) executive’s termination of his own employment for “good reason” (as defined in the agreement), either of which occurs within 12 months following the effective date of a “change in control” (as defined in the agreement). If a covered termination occurs, Mr. Beaver would be entitled to:

 

    a lump sum cash severance payment equal to his annual base salary, which salary is currently set at $165,000;

 

    fully-accelerate the vesting on all his then-outstanding compensatory equity awards, as of the employment termination date; and

 

    up to twelve months of company paid premium reimbursements for his and his eligible dependents if Mr. Beaver is eligible for and elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”).

Such severance benefits may be subject to a cut-back if such payments constitute excess parachute payments within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, if such cut-back would result in a higher after-tax amount being paid to Mr. Beaver.

Under the Change in Control Severance Agreement, Mr. Beaver is also agreeing to certain non-competition covenants that are operable during the term of the agreement and for a period of at least 12 months following the date Mr. Beaver’s employment is terminated. Further, Mr. Beaver’s right to receive the severance benefits set forth in the agreement is subject to Mr. Beaver executing, and not revoking, a separation agreement and release of claims in a form acceptable to the Company.

 

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Transactions with Management

Uwharrie Bank (formerly Bank of Stanly, Anson Bank & Trust Co., and 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 not affiliated with the lender and do not involve more than the normal risk of collectability or present other unfavorable features.

Loans made by the Company’s bank subsidiary 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 and dollar limitations on amounts of certain loans. In addition, Regulation O 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.

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has appointed the firm of Dixon Hughes Goodman LLP, Certified Public Accountants, as the Company’s independent accountants for 2016, and a proposal to ratify that appointment will be submitted for shareholder approval at the Annual Meeting. A representative of Dixon Hughes Goodman LLP is expected to be present at the Annual Meeting and available to respond to appropriate questions, and the representative will have the opportunity to make a statement if he or she desires to do so.

Please see below for additional information regarding Audit Fees paid to Dixon Hughes Goodman LLP as well as the Report of the Audit Committee.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF DIXON HUGHES GOODMAN LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016.

AUDIT FEES

The Company has incurred or expects to incur fees in connection with its annual audit and quarterly reviews of the Company’s consolidated financial statements.

The Company also engages Dixon Hughes Goodman LLP to provide other attestation and audit-related services. These fees were primarily related to audits of the Company’s benefit plans and in the prior year, a custody audit and compliance examinations. All services rendered by Dixon Hughes Goodman LLP during 2015 and 2014 were subject to pre-approval by the Audit Committee.

 

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The following table sets forth the fees paid to Dixon Hughes Goodman LLP in various categories in 2015 and 2014.

 

Category

  Amount Paid 2015     Amount Paid 2014  

Audit Fees:

  $ 163,000      $ 155,315   

Audits of annual consolidated financial statements, reviews of interim financial statements, reviews of filings with the Securities and Exchange Commission and statutory audits

   

Audit-Related Fees:

    13,475        44,000   

Attestation services related to audits of benefit plans and routine accounting consultations and in the prior year, Registered Investment Advisor exam procedures

   

Tax Fees:

    22,655        25,875   

Corporate tax compliance and tax-related advisory services

   

All Other Fees:

    0        0   
 

 

 

   

 

 

 

Total Fees Paid

  $ 199,130      $ 225,190   
 

 

 

   

 

 

 

REPORT OF THE AUDIT COMMITTEE

The Audit 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 Audit Committee assesses the performance and independence of the Company’s independent auditors and recommends their appointment and retention. The Audit 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 2015, the Audit Committee reviewed and discussed the audited consolidated financial statements with management. The Audit 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 as required by Public Company Accounting Oversight Board Auditing Standard No. 16, Communication with Audit Committees, and other applicable standards. Furthermore, the Audit Committee received from Dixon Hughes Goodman LLP written disclosures and correspondence regarding their independence and discussed such information with Dixon Hughes Goodman LLP.

Based on the review and discussions above, the Audit Committee (i) 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, 2015, for filing with the SEC and (ii) recommended that shareholders ratify the appointment of Dixon Hughes Goodman LLP as auditors for 2016.

The Audit 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 Audit Committee has determined that such services are compatible with maintaining the independence of Dixon Hughes Goodman LLP.

 

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This report is submitted by the Audit Committee:

S. Todd Swaringen - Chairman

W. Stephen Aldridge, III

Joe S. Brooks

Ronald T. Burleson

Bill C. Burnside

James O. Campbell

Thomas M. Hearne, Jr.

Charles D. Horne

Samuel M. Leder

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 2017 Annual Meeting must be received by the Company at its main office in Albemarle, North Carolina, no later than December 19, 2016, 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 Company’s 2017 Annual Meeting is not expected to be included in the proxy statement for that meeting, the proposal must be received by the Company by March 6, 2017 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.

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, 2015 as filed with the SEC, by logging on at www.edocumentview.com/UWHR.

 

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ADDITIONAL INFORMATION

A COPY OF THE COMPANY’S 2015 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.

 

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Exhibit A

Uwharrie Capital Corp

Human Resources and Compensation Committee Charter

Purpose

The Human Resources and 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 human resources and 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 responsibilities, 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 the entire Board of Directors, unless it is deemed necessary that a smaller group is needed. Each member of the Committee shall: (i) be “independent” as defined by applicable rules and regulations promulgated under the Securities Exchange Act of 1934; (ii) a “Non-Employee Director” as that term is defined under Rule 16b-3 promulgated by the Securities and Exchange Commission (the “SEC”) and any other applicable SEC regulation; (iii) an “Outside Director” as that term is defined for the purposes of Internal Revenue Code Section 162(m); and (iv) 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

 

32


prepared or presented to them by (i) officers and other employees of the Company or its subsidiaries, 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.

In determining appropriate levels of compensation, whether for officers, directors, or other employees, the Committee should evaluate whether applicable compensation, benefit, and/or incentive plans (i) promote acceptable levels of risk, (ii) encourage appropriate levels of long-term value creation, and (iii) avoid the promotion of unnecessary and excessive risk taking.

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.

 

33


Exhibit B

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

 

34


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 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.

 

35


Exhibit C

Uwharrie Capital Corp

Audit Committee Charter

Organization

There shall be a committee of the Board of Directors to be known as the Audit Committee. The Audit Committee shall be composed of directors who are independent of 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 Audit Committee members meet the requirements for independence set forth in the NASDAQ listing rules. Members of the Audit Committee shall be financially literate or become financially literate within a reasonable period of time after appointment to the Audit 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 Audit 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 Audit 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 Audit 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 Audit 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 Audit 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 Audit 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 Audit 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.

 

36


    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 Audit Committee by the Committee Chair, who will report thereon to the full Audit 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.

 

    Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of reviews conducted.

 

    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 Audit 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 Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit 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 Audit Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditor or to assure compliance with laws and regulations.

 

37


LOGO

UNWHARRIE
CAPITAL CORP
IMPORTANT ANNUAL MEETING INFORMATION
Using a black ink pen, mark your votes with an X as shown in x
this example. Please do not write outside the designated areas.
Annual Meeting Proxy Card
q PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
A Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal 2.
1. ELECTION OF DIRECTORS:
Election of nine (9) Directors for terms as indicated below or until their successors are duly elected and qualified.
Nominees for Three-Year Terms:
+
For Withhold For Withhold For Withhold 01—Raymond R. Cranford, Jr. ¨ ¨ 02—Thomas M. Hearne, Jr. ¨ ¨ 03—Harvey H. Leavitt, III ¨ ¨ 04—Cynthia L. Mynatt ¨ ¨ 05—James E. Nance ¨ ¨ 06—S. Todd Swaringen ¨ ¨ Nominees for Two-Year Terms: For Withhold For Withhold 07—James O. Campbell ¨ ¨ 08—Samuel M. Leder ¨ ¨ Nominee for One-Year Term: For Withhold 09—Frank A. (Alex) Rankin, III ¨ ¨
For Against Abstain 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM: To ratify the appointment of Dixon Hughes Goodman LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2016. ¨ ¨ ¨ 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.
B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
lnstruction: Please sign below 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.
Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box.
1UPX 2671262 +
02CASB


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Annual Meeting Materials are available on-line at:
http://www.edocumentview.com/UWHR
q PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
REVOCABLE PROXY — UWHARRIE CAPITAL CORP
ANNUAL MEETING OF SHAREHOLDERS
May 10, 2016, 6:00 p.m.
THIS PROXY IS SOLICITED ON BEHALF OF 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 10, 2016, at the Annual Meeting of Shareholders of the Company to be held at the Stanly County Agri-Civic Center, 26032 Newt Road, Albemarle, North Carolina, 6:00 p.m. on May 10, 2016, and at any adjournments thereof (the “Annual Meeting”).
I (We) direct that the shares represented by this appointment of proxy be voted as instructed on 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.
IMPORTANT: TO ENSURE YOUR SHARES ARE REPRESENTED AND THAT A QUORUM IS PRESENT AT THE ANNUAL MEETING,
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
PLEASE COMPLETE THE ENCLOSED DINNER RESERVATION POSTCARD AND MAIL TO UWHARRIE CAPITAL CORP.
DINNER WILL BEGIN AT 4:30 p.m.


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UNWHARRIE
CAPITAL CORP
IMPORTANT ANNUAL MEETING INFORMATION 000004
ENDORSEMENT_LINE______________ SACKPACK_____________
MR A SAMPLE
DESIGNATION (IF ANY)
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Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet must be received by 2:00 a.m., Eastern Time, on May 10, 2016.
Vote by Internet
• Go to www.envisionreports.com/UWHR
• Or scan the QR code with your smartphone
• Follow the steps outlined on the secure website
Using a black ink pen, mark your votes with an X as shown in X
this example. Please do not write outside the designated areas.
Annual Meeting Proxy Card 1234 5678 9012 345
q IF YOU HAVE NOT VOTED VIA THE INTERNET, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
A Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal 2.
1. ELECTION OF DIRECTORS:
Election of nine (9) Directors for terms as indicated below or until their successors are duly elected and qualified.
Nominees for Three-Year Terms:
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For Withhold For Withhold For Withhold 01—Raymond R. Cranford, Jr. ¨ ¨ 02—Thomas M. Hearne, Jr. ¨ ¨ 03—Harvey H. Leavitt, III ¨ ¨ 04—Cynthia L. Mynatt ¨ ¨ 05—James E. Nance ¨ ¨ 06—S. Todd Swaringen ¨ ¨ Nominees for Two-Year Terms: For Withhold For Withhold 07—James O. Campbell ¨ ¨ 08—Samuel M. Leder ¨ ¨ Nominee for One-Year Term: For Withhold 09—Frank A. (Alex) Rankin, III ¨ ¨
For Against Abstain 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM: To ratify the appointment of Dixon Hughes Goodman LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2016. ¨ ¨ ¨ 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.
B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
lnstruction: Please sign below 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.
Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box.
IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.
C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND 1UPX 2 6 7 1 2 6 1 MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND +
02CARB


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Annual Meeting Materials are available on-line at:
http://www.envisionreports.com/UWHR
q IF YOU HAVE NOT VOTED VIA THE INTERNET, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
REVOCABLE PROXY — UWHARRIE CAPITAL CORP +
ANNUAL MEETING OF SHAREHOLDERS
May 10, 2016, 6:00 p.m.
THIS PROXY IS SOLICITED ON BEHALF OF 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 10, 2016, at the Annual Meeting of Shareholders of the Company to be held at the Stanly County Agri-Civic Center, 26032 Newt Road, Albemarle, North Carolina, 6:00 p.m. on May 10, 2016, and at any adjournments thereof (the “Annual Meeting”).
I (We) direct that the shares represented by this appointment of proxy be voted as instructed on 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.
IMPORTANT: TO ENSURE YOUR SHARES ARE REPRESENTED AND THAT A QUORUM IS PRESENT AT THE ANNUAL MEETING,
PLEASE PROVIDE YOUR INSTRUCTIONS TO VOTE BY THE INTERNET
OR COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
PLEASE COMPLETE THE ENCLOSED DINNER RESERVATION POSTCARD AND MAIL TO UWHARRIE CAPITAL CORP.
DINNER WILL BEGIN AT 4:30 p.m.
C Non-Voting Items Meeting Attendance Change of Address — Please print your new address below. Comments — Please print your comments below. Mark this box ¨ if you plan to attend the Annual Meeting. Complete the enclosed DINNER RESERVATION POSTCARD and mail to Uwharrie Capital Corp.
IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. +