The Herald, Sharon, PA Published Saturday, April 21, 2001

HERMITAGE

Some FNB proxies voided

By Michael Roknick
Herald Business Editor

A federal judge in Florida pulled the plug on two FNB Corp. shareholders who were seeking, among other things, to slash salaries of top company executives.

FNB moved its corporate headquarters from Hermitage to Naples, Fla., last month. FNB owns First National Bank of Pennsylvania, which continues to be headquartered in Hermitage.

In his order, Judge John Steele in U.S. District Court Fort Myers Division said Greenville lawyer Michael C. Halliday and Donald C. McClimans, a former area resident who lives in Florida, violated federal securities laws and related regulations by sending proxies to FNB shareholders. Steele issued a temporary restraining order preventing the two from any further solicitation of company shareholders and declared all the proxies solicited by them "null and void.’’

A proxy is a form that transfers a person’s corporate voting right to another person.

The company filed a complaint in federal court in Fort Myers seeking an injunction against Halliday and McClimans. The two men sent proxies to FNB shareholders seeking their votes on a number of measures, according to the complaint.

The statements sent by the two to shareholders, according to FNB’s complaint, sought among other things to immediately freeze the salaries of FNB’s top five executives and, along with company directors, have their pay slashed 10 percent. Also, the two wanted: an additional 10 percent pay cut for the top executives each year for the next four years; the return of company cars issued to top officers, directors and other employees; a ban on offers’ further options to buy stock; and that FNB dissolve itself of any ownership it has in an aircraft.

In his order, Steele prohibited Halliday and McClimans from voting the proxies at the company’s annual shareholders meeting on Monday in Naples. Also, the two must send a copy of Steele’s order to all shareholders who received the proxies.

In its complaint, FNB said the two did not submit their proxies to the Securities and Exchange Commission as required by law. Also, the complaint said, the two men sent "corrupt and illegal solicitation of proxies through the distribution of incomplete, false and misleading proxy materials to FNB shareholders.’’

Halliday did not return a phone message left at his Greenville office; McClimans declined to comment.

On Friday, Steve Gurgovits, vice chairman of FNB, said the company was pleased with the ruling.

"We expected the outcome to be what has occurred,’’ Gurgovits said. "There were false and misleading statements and the failure to comply with disclosure requirements.’’

Calling the men’s actions and the subsequent court matters an "annoyance and distraction,’’ Gurgovits said FNB expects its officers and directors to receive overwhelming support for their proposals and actions at Monday’s meeting.

With assets of more than $4 billion, FNB is a diversified financial service company with about 8,000 shareholders.



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