Common use of Conversion and Exchange of Shares Clause in Contracts

Conversion and Exchange of Shares. 1. At the Effective Time, all rights of Integrity’s shareholders with respect to all then outstanding shares of the common stock of Integrity, $1.00 par value per share (“Integrity Stock”) shall cease to exist, and the holders of Integrity Stock shall cease to be, and shall have no further rights as, shareholders of Integrity. At the Effective Time, each such outstanding share of Integrity Stock (except for shares held, other than in a fiduciary capacity or as a result of debts previously contracted, by Integrity, FNB or any of their subsidiaries, which shall be canceled in the Merger) shall be converted exclusively into the right to receive $5.20 in cash, without interest, and a number of shares of the common stock of FNB, par value $2.50 per share (the “FNB Stock”), equal to the product of 1.1209 (the “Exchange Ratio”) and 0.78. The amount of cash into which shares of Integrity Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to as “Cash Consideration,” and the number of shares of FNB Stock into which shares of Integrity Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to as “Stock Consideration.” The Cash Consideration and Stock Consideration are sometimes referred to herein collectively as the “Merger Consideration.” No share of Integrity Stock shall be deemed to be outstanding or have any rights other than those set forth in this Section E.1 after the Effective Time. [The Exchange Ratio is subject to possible adjustment in accordance with Sections 1.5(c) and 8.2(c) of the Agreement and Plan of Merger, dated as of September 18, 2005, by and between FNB and Integrity. If so adjusted, the adjusted Exchange Ratio shall be reflected in this Plan of Merger prior to filing with the Secretary of State of North Carolina.] 2. Each share of the FNB Stock issued and outstanding immediately prior to the Effective Time of the Merger shall continue to be issued and outstanding and shall not be affected by the Merger. 3. Notwithstanding any other provision of this Plan of Merger, each holder of shares of Integrity Stock exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of FNB Stock (after taking into account all certificates delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional part of a share of FNB Stock multiplied by the market value of one share of FNB Stock upon the Effective Time. The market value of one share of FNB Stock at the Effective Time shall be the last sale price of FNB Stock on Nasdaq Stock Market, Inc. National Market System as reported by The Wall Street Journal or, if not reported thereby, any other authoritative source selected by FNB, on the last trading day preceding the Effective Time. No such holder will be entitled to dividends, voting rights, or any other rights as a shareholder in respect of any fractional shares. 4. As of the Effective Time, FNB shall deposit, or shall cause to be deposited, with Registrar and Transfer Company, in its capacity as the transfer agent of FNB Stock (the “Exchange Agent”), for the benefit of each holder of Integrity Stock for exchange in accordance with this Plan of Merger, (i) certificates representing the aggregate number of whole shares of FNB Stock to be issued as Stock Consideration, and (ii) the aggregate amount of cash to be delivered to holders of Integrity Stock as Cash Consideration and in lieu of any fractional shares, to be issued and paid pursuant to this Plan of Merger for outstanding shares of Integrity Stock (such certificates for shares of FNB Stock and such cash are referred to as the “Exchange Fund”). The Exchange Agent shall, pursuant to irrevocable instructions in accordance with this Plan of Merger, deliver the FNB Stock and cash contemplated to be issued with respect to Integrity Stock out of the Exchange Fund. The Exchange Fund shall not be used for any other purpose. The Exchange Agent shall invest any cash included in the Exchange Fund, as directed by FNB, on a daily basis. Any interest and other income resulting from such investments shall be paid to FNB. 5. After the Effective Time, FNB shall cause the Exchange Agent to mail to the shareholders of Integrity of record at the Effective Time transmittal materials and other appropriate written instructions (collectively, a “Transmittal Letter”) (which shall specify that delivery shall be effected, and risk of loss and title to the certificate representing shares of Integrity Stock prior to such Effective Time shall pass, only upon proper delivery of such certificates to the Exchange Agent and which shall be in such form and have such other provisions as FNB may reasonably specify). After the Effective Time and upon the proper surrender of certificate(s) representing shares of Integrity Stock to the Exchange Agent, together with a properly completed and duly executed Transmittal Letter, the holder of such certificate(s) shall be entitled to receive in exchange therefor the number of shares of FNB Stock and the cash to which such holder is entitled hereunder (including any cash payments to which such holder is entitled hereunder in respect of rights to receive fractional shares and any dividends or other distributions to which such holder is entitled pursuant to Section E.6 below), subject to any required withholding of applicable taxes. Neither FNB nor the Exchange Agent shall be obligated to deliver any of such payments in cash or stock until such holder surrenders the certificate(s) representing such holder’s shares. The certificate(s) so surrendered shall be duly endorsed as the Exchange Agent may require. If there is a transfer of ownership of any shares of Integrity Stock not registered in the transfer records of Integrity, the Merger Consideration shall be issued to the transferee thereof if the certificates representing such Integrity Stock are presented to the Exchange Agent, accompanied by all documents required, in the reasonable judgment of FNB and the Exchange Agent, to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid. Any portion of the Exchange Fund that remains undistributed to the holders of certificates representing Integrity Stock for six months after the Effective Time shall be delivered to FNB, upon demand, and any shareholders of Integrity who have not previously complied with the provisions of this Plan of Merger shall thereafter look only to FNB for payment of their claim for FNB Stock and cash and any dividends or distributions with respect to FNB Stock. Any portion of the Exchange Fund remaining unclaimed by holders of Integrity Stock five years after the Effective Time (or such earlier date immediately prior to such time as such portion would otherwise escheat to or become property of any government entity) shall, to the extent permitted by applicable law, become the property of FNB free and clear of any claims or interest of any person previously entitled therein. Any other provision of this Agreement notwithstanding, neither FNB nor the Exchange Agent shall be liable to any holder of shares of Integrity Stock for any amounts paid or properly delivered in good faith to a public official pursuant to any applicable abandoned property law. 6. At the Effective Time, the stock transfer books of Integrity shall be closed as to holders of Integrity Stock immediately prior to the Effective Time and no transfer of Integrity Stock by any such holder shall thereafter be made or recognized. Until surrendered for exchange in accordance with the provisions of Section E.5 above, each certificate theretofore representing shares of Integrity Stock (other than shares to be canceled pursuant to Section E.1 above) shall from and after the Effective Time represent for all purposes only the right to receive the Merger Consideration. If, after the Effective Time, certificates representing Integrity Stock are presented to FNB or the Exchange Agent for any reason, they shall be cancelled and exchanged as provided in this Plan of Merger. To the extent permitted by North Carolina law, former shareholders of record of Integrity shall be entitled to vote after the Effective Time at any meeting of shareholders of FNB the number of whole shares of FNB Stock into which their respective shares of Integrity Stock are converted, regardless of whether such holders have exchanged their certificates representing Integrity Stock for certificates representing FNB Stock in accordance with the provisions of this Agreement. Whenever a dividend or other distribution is declared by FNB on the FNB Stock, the record date for which is at or after the Effective Time, the declaration shall include dividends or other distributions on all shares of FNB Stock to be issued pursuant to the Merger, but beginning at the Effective Time no dividend or other distribution payable to the holders of record of FNB Stock as of any time subsequent to the Effective Time shall be delivered to the holder of any certificate representing shares of Integrity Stock issued and outstanding at the Effective Time until such holder surrenders such certificate for exchange as provided in Section E.5 above; provided, however, that upon surrender of such Integrity Stock certificate (or compliance with Section E.7 below), the FNB Stock certificate, together with all undelivered dividends or other distributions (without interest) and any cash payments to be paid for fractional share interests (without interest), shall be delivered and paid with respect to each share represented by such Integrity Stock certificate. 7. Any shareholder of Integrity whose certificate representing shares of Integrity Stock has been lost, destroyed, stolen or otherwise is missing shall be entitled to receive a certificate representing the shares of FNB Stock and/or any cash, including cash in lieu of fractional shares, to which he or she is entitled in accordance with and upon compliance with conditions reasonably imposed by the exchange agent or FNB (including, without limitation, a requirement that the shareholder provide a lost instruments indemnity bond in form, substance and amount reasonably satisfactory to the exchange agent and FNB).

Conversion and Exchange of Shares. 1At the Effective Time, by virtue of the Merger: 1.2.1. Each share of Common Stock, par value $.01 per share, of the Company (including any associated preferred stock purchase rights) (shares of Common Stock together with the associated rights, the "Company Common Shares") and each share of Money Market Preferred Stock, par value $.01 per share, of the Company ("Company Money Market Preferred Shares") held by the Company as treasury stock or held by Parent or any Subsidiary of Parent or the Company immediately prior to the Effective Time (each, an "Excluded Share") shall be canceled and no payment of any consideration shall be made with respect to these shares. 1.2.2. Subject to Section 1.5, each Company Common Share outstanding immediately prior to the Effective Time, other than the Excluded Shares, shall be converted into and shall be canceled in exchange for the right to receive .835 (the "Exchange Ratio") American Depositary Shares of Parent ("Parent Depositary Shares"), each Parent Depositary Share representing five (5) ordinary shares of nominal value 10p each of Parent ("Parent Ordinary Shares"). Each holder of converted and canceled Company Common Shares shall have the right to elect to receive, in lieu of some or all of the Parent Depositary Shares the holder has the right to receive pursuant to the prior sentence, the Parent Ordinary Shares represented by the Parent Depositary Shares in respect of which this election is made. 1.2.3. Subject to Section 1.8, each Company Money Market Preferred Share outstanding immediately prior to the Effective Time, other than Company Money Market Preferred Shares constituting Excluded Shares, shall be converted into and shall be canceled in exchange for the right to receive from the Company (solely out of cash of its own on hand or out of its own borrowings), $115 in cash plus the amount of all dividends accrued and unpaid in respect of the Company Money Market Preferred Share as of the Closing Date, without interest thereon (the "Preferred Consideration"). 1.2.4. The Parent Depositary Shares issued in connection with the Merger shall be evidenced by one or more receipts ("Parent ADRs") issued in accordance with the Amended and Restated Deposit Agreement, dated as of October 24, 1995, among Parent, Citibank, N.A., as Depositary (the "Depositary"), and the holders and beneficial owners from time to time of Parent ADRs, as amended and restated in accordance with this Agreement as of the date on which the Effective Time occurs (the "Deposit Agreement"). As of the Effective Time, the Company shall be liable for all United Kingdom stamp duties, stamp duty reserve tax and other similar taxes and similar levies imposed in connection with the issuance or creation of the Parent Depositary Shares to be issued in the Merger and any Parent ADRs in connection therewith and any other United Kingdom stamp duty, stamp duty reserve tax or other similar United Kingdom governmental charge (or any interest or penalties thereon) that may be payable by Parent and the Company pursuant to the Deposit Agreement. The Company shall have the same obligation with respect to issuance of Parent Depositary Shares and Parent ADRs in connection with the exercise of any Company Stock Options outstanding as of the Effective Time that become exercisable for Parent Depositary Shares in accordance with Section 1.4.1. Subject to Section 1.3.3, no holder of Company Stock Options or Company Common Shares shall be obligated to pay any fee or other charge or expense to the Depositary, in connection with the issuance of Parent Ordinary Shares, Parent Depositary Shares or Parent ADRs pursuant to the Merger or Company Stock Options outstanding at the Effective Time, or the related Parent Certificates (as defined in Section 1.3.1). 1.2.5. At the Effective Time, all rights of Integrity’s shareholders with respect to all then outstanding shares of the common stock of IntegrityCompany Common Shares and Company Money Market Preferred Shares shall no longer be outstanding, $1.00 par value per share (“Integrity Stock”) shall be canceled and retired and shall cease to exist, and the holders of Integrity Stock shall cease to be, and shall have no further rights as, shareholders of Integrity. At the Effective Time, each such outstanding share of Integrity Stock certificate (except for shares held, a "Common Certificate") formerly representing any Company Common Shares (other than in a fiduciary capacity or as a result of debts previously contracted, by Integrity, FNB or any of their subsidiaries, which shall be canceled in the MergerCompany Common Shares constituting Excluded Shares) shall be converted exclusively into thereafter represent only the right to receive $5.20 Parent Depositary Shares (or at the election of the holder of canceled Company Common Shares, Parent Ordinary Shares) as provided in cashSection 1.2.2 and the right, if any, to receive cash in lieu of fractional interests in Parent Depositary Shares or Parent Ordinary Shares, as applicable, pursuant to Section 1.5 and any distribution or dividend pursuant to Section 1.3.6, in each case without interest, and each certificate (a number of shares "Preferred Certificate" and when referred to together with Common Certificates, the "Certificates") formerly representing any Company Money Market Preferred Shares (other than Company Money Market Preferred Shares constituting Excluded Shares) shall thereafter represent only the right to receive the Preferred Consideration with respect to each Company Money Market Preferred Share formerly represented by the Preferred Certificate. Subject to the contemplated amendments to the Deposit Agreement set forth in Section 3.20, the Parent Depositary Shares and Parent Ordinary Shares issued in accordance with this Article I shall be of the same class and shall have the same rights as the currently outstanding Parent Depositary Shares or the currently outstanding Parent Ordinary Shares, as applicable (it being understood that no dividends in respect of the year ended December 31, 1999 or any other dividend for which the record date is prior to the date of the Effective Time shall be paid in respect of the Parent Depositary Shares or Parent Ordinary Shares issued pursuant to this Article I). 1.2.6. Each share of common stock of FNBMerger Sub, par value $2.50 0.01 per share (the “FNB Stock”)share, equal to the product of 1.1209 (the “Exchange Ratio”) and 0.78. The amount of cash into which shares of Integrity Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to as “Cash Consideration,” and the number of shares of FNB Stock into which shares of Integrity Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to as “Stock Consideration.” The Cash Consideration and Stock Consideration are sometimes referred to herein collectively as the “Merger Consideration.” No share of Integrity Stock shall be deemed to be outstanding or have any rights other than those set forth in this Section E.1 after the Effective Time. [The Exchange Ratio is subject to possible adjustment in accordance with Sections 1.5(c) and 8.2(c) of the Agreement and Plan of Merger, dated as of September 18, 2005, by and between FNB and Integrity. If so adjusted, the adjusted Exchange Ratio shall be reflected in this Plan of Merger prior to filing with the Secretary of State of North Carolina.] 2. Each share of the FNB Stock issued and outstanding immediately prior to the Effective Time of the Merger shall continue to be issued and outstanding and shall not be affected by the Merger. 3. Notwithstanding any other provision of this Plan of Merger, each holder of shares of Integrity Stock exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of FNB Stock (after taking converted into account all certificates delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional part of a share of FNB Stock multiplied by the market value of one share of FNB Stock upon common stock of the Effective Time. The market value of one share of FNB Stock at the Effective Time shall be the last sale price of FNB Stock on Nasdaq Stock Market, Inc. National Market System as reported by The Wall Street Journal or, if not reported thereby, any other authoritative source selected by FNB, on the last trading day preceding the Effective Time. No such holder will be entitled to dividends, voting rights, or any other rights as a shareholder in respect of any fractional sharesSurviving Corporation. 41.2.7. As of In the Effective Timeevent that, FNB shall deposit, or shall cause to be deposited, with Registrar and Transfer Company, in its capacity as the transfer agent of FNB Stock (the “Exchange Agent”), for the benefit of each holder of Integrity Stock for exchange in accordance with this Plan of Merger, (i) certificates representing the aggregate number of whole shares of FNB Stock to be issued as Stock Consideration, and (ii) the aggregate amount of cash to be delivered to holders of Integrity Stock as Cash Consideration and in lieu of any fractional shares, to be issued and paid pursuant to this Plan of Merger for outstanding shares of Integrity Stock (such certificates for shares of FNB Stock and such cash are referred to as the “Exchange Fund”). The Exchange Agent shall, pursuant to irrevocable instructions in accordance with this Plan of Merger, deliver the FNB Stock and cash contemplated to be issued with respect to Integrity Stock out of the Exchange Fund. The Exchange Fund shall not be used for any other purpose. The Exchange Agent shall invest any cash included in the Exchange Fund, as directed by FNB, on a daily basis. Any interest and other income resulting from such investments shall be paid to FNB. 5. After the Effective Time, FNB shall cause the Exchange Agent to mail subsequent to the shareholders of Integrity of record at the Effective Time transmittal materials and other appropriate written instructions (collectively, a “Transmittal Letter”) (which shall specify that delivery shall be effected, and risk of loss and title to the certificate representing shares of Integrity Stock prior to such Effective Time shall pass, only upon proper delivery of such certificates to the Exchange Agent and which shall be in such form and have such other provisions as FNB may reasonably specify). After the Effective Time and upon the proper surrender of certificate(s) representing shares of Integrity Stock to the Exchange Agent, together with a properly completed and duly executed Transmittal Letter, the holder of such certificate(s) shall be entitled to receive in exchange therefor the number of shares of FNB Stock and the cash to which such holder is entitled hereunder (including any cash payments to which such holder is entitled hereunder in respect of rights to receive fractional shares and any dividends or other distributions to which such holder is entitled pursuant to Section E.6 below), subject to any required withholding of applicable taxes. Neither FNB nor the Exchange Agent shall be obligated to deliver any of such payments in cash or stock until such holder surrenders the certificate(s) representing such holder’s shares. The certificate(s) so surrendered shall be duly endorsed as the Exchange Agent may require. If there is a transfer of ownership of any shares of Integrity Stock not registered in the transfer records of Integrity, the Merger Consideration shall be issued to the transferee thereof if the certificates representing such Integrity Stock are presented to the Exchange Agent, accompanied by all documents required, in the reasonable judgment of FNB and the Exchange Agent, to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid. Any portion of the Exchange Fund that remains undistributed to the holders of certificates representing Integrity Stock for six months after the Effective Time shall be delivered to FNB, upon demand, and any shareholders of Integrity who have not previously complied with the provisions of this Plan of Merger shall thereafter look only to FNB for payment of their claim for FNB Stock and cash and any dividends or distributions with respect to FNB Stock. Any portion of the Exchange Fund remaining unclaimed by holders of Integrity Stock five years after the Effective Time (or such earlier date immediately prior to such time as such portion would otherwise escheat to or become property of any government entity) shall, to the extent permitted by applicable law, become the property of FNB free and clear of any claims or interest of any person previously entitled therein. Any other provision of this Agreement notwithstanding, neither FNB nor the Exchange Agent shall be liable but prior to any holder of shares of Integrity Stock for any amounts paid or properly delivered in good faith to a public official pursuant to any applicable abandoned property law. 6. At the Effective Time, the stock transfer books of Integrity shall be closed as to holders of Integrity Stock immediately prior to the Effective Time and no transfer of Integrity Stock by any such holder shall thereafter be made or recognized. Until surrendered for exchange in accordance with the provisions of Section E.5 above, each certificate theretofore representing shares of Integrity Stock (other than shares to be canceled pursuant to Section E.1 above) shall from and after the Effective Time represent for all purposes only the right to receive the Merger Consideration. If, after the Effective Time, certificates representing Integrity Stock are presented to FNB or the Exchange Agent for any reason, they shall be cancelled and exchanged as provided in this Plan of Merger. To the extent permitted by North Carolina law, former shareholders of record of Integrity shall be entitled to vote after the Effective Time at any meeting of shareholders of FNB Company changes the number of whole shares Company Common Shares or Company Money Market Preferred Shares, or Parent changes the number of FNB Stock into which their respective shares Parent Ordinary Shares, issued and outstanding, in each case as a result of Integrity Stock are converteda stock split, regardless reverse stock split, stock dividend, recapitalization or redenomination of whether such holders have exchanged their certificates representing Integrity Stock for certificates representing FNB Stock in accordance with share capital, or Parent changes the provisions number of this Agreement. Whenever Parent Ordinary Shares represented by a dividend or other distribution is declared by FNB on the FNB StockParent Depositary Share, the record date for which is at or after Exchange Ratio and/or the Effective TimePreferred Consideration, the declaration shall include dividends or as applicable, and other distributions on all shares of FNB Stock to be issued pursuant to the Merger, but beginning at the Effective Time no dividend or other distribution payable to the holders of record of FNB Stock as of any time subsequent to the Effective Time items dependent thereon shall be delivered to the holder of any certificate representing shares of Integrity Stock issued and outstanding at the Effective Time until such holder surrenders such certificate for exchange as provided in Section E.5 above; provided, however, that upon surrender of such Integrity Stock certificate (or compliance with Section E.7 below), the FNB Stock certificate, together with all undelivered dividends or other distributions (without interest) and any cash payments to be paid for fractional share interests (without interest), shall be delivered and paid with respect to each share represented by such Integrity Stock certificateappropriately adjusted. 7. Any shareholder of Integrity whose certificate representing shares of Integrity Stock has been lost, destroyed, stolen or otherwise is missing shall be entitled to receive a certificate representing the shares of FNB Stock and/or any cash, including cash in lieu of fractional shares, to which he or she is entitled in accordance with and upon compliance with conditions reasonably imposed by the exchange agent or FNB (including, without limitation, a requirement that the shareholder provide a lost instruments indemnity bond in form, substance and amount reasonably satisfactory to the exchange agent and FNB).

Conversion and Exchange of Shares. 1. At the Effective Time, all rights of IntegrityUnited’s shareholders with respect to all then outstanding shares of the common stock of IntegrityUnited, $1.00 par value per share (“Integrity United Stock”) shall cease to exist, and the holders of Integrity United Stock shall cease to be, and shall have no further rights as, shareholders of IntegrityUnited. At Subject to Section E.7 below, at the Effective Time, each such outstanding share of Integrity United Stock (except for shares held, other than in a fiduciary capacity or as a result of debts previously contracted, by IntegrityUnited, FNB or any of their subsidiaries, which shall be canceled in the Merger, and for Dissenting Shares (as defined in Section E.7)) shall be converted exclusively into the right to receive receive, at the election of the holder thereof, either: (A) $5.20 14.25 in cash, without interest, and a number of ; (B) 0.6828 shares (the “Exchange Ratio”) of the common stock of FNB, par value $2.50 per share (the “FNB Stock”), ; or (C) 35% of the cash amount set forth in clause (A) above and a number of shares of FNB equal to 65% of the product of 1.1209 (the “Exchange Ratio”; provided, however, that a holder of United Stock may, pursuant to Section E.4, make no election, in which case such shares of United Stock held by such holder shall be converted exclusively into the right to receive the consideration set forth in Section E.4(e) and 0.78below with respect to Non-Election Shares (as defined in Section E.4(b)). The amount of cash into which shares of Integrity United Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to as “Cash Consideration,” and the number of shares of FNB Stock into which shares of Integrity United Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to as “Stock Consideration.” The Cash Consideration and Stock Consideration are sometimes referred to herein collectively as the “Merger Consideration.” No share of Integrity Stock United Stock, other than Dissenting Shares (defined in Section E.7), shall be deemed to be outstanding or have any rights other than those set forth in this Section E.1 after the Effective Time. [The Exchange Ratio is subject to possible adjustment in accordance with Sections Section 1.5(c) and 8.2(c) of the Agreement and Plan of Merger, dated as of September 18May 9, 2005, by and between FNB and IntegrityUnited. If so adjusted, the adjusted Exchange Ratio shall be reflected in this Plan of Merger prior to filing with the Secretary of State of North Carolina.] 2. Each share of the FNB Stock issued and outstanding immediately prior to the Effective Time of the Merger shall continue to be issued and outstanding and shall not be affected by the Merger. 3. Notwithstanding any other provision of this Plan of Merger, each holder of shares of Integrity United Stock exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of FNB Stock (after taking into account all certificates delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional part of a share of FNB Stock multiplied by the market value of one share of FNB Stock upon the Effective Time. The market value of one share of FNB Stock at the Effective Time shall be the last sale price of FNB Stock on Nasdaq Stock Market, Inc. National Market System as reported by The Wall Street Journal or, if not reported thereby, any other authoritative source selected by FNB, on the last trading day preceding the Effective Time. No such holder will be entitled to dividends, voting rights, or any other rights as a shareholder in respect of any fractional shares. 4. As of the Effective Time, FNB shall deposit, or shall cause to be deposited, with Registrar and Transfer Company, in its capacity as the transfer agent of FNB Stock (the a) An election form (an “Exchange AgentElection Form”), for the benefit of each holder of Integrity Stock for exchange in accordance with this Plan of Merger, (i) certificates representing the aggregate number of whole shares of FNB Stock to be issued as Stock Consideration, and (ii) the aggregate amount of cash to be delivered to holders of Integrity Stock as Cash Consideration and in lieu of any fractional shares, to be issued and paid pursuant to this Plan of Merger for outstanding shares of Integrity Stock (such certificates for shares of FNB Stock and such cash are referred to as the “Exchange Fund”). The Exchange Agent shall, pursuant to irrevocable instructions in accordance with this Plan of Merger, deliver the FNB Stock and cash contemplated to be issued with respect to Integrity Stock out of the Exchange Fund. The Exchange Fund shall not be used for any other purpose. The Exchange Agent shall invest any cash included in the Exchange Fund, as directed by FNB, on a daily basis. Any interest and other income resulting from such investments shall be paid to FNB. 5. After the Effective Time, FNB shall cause the Exchange Agent to mail to the shareholders of Integrity of record at the Effective Time transmittal materials and other appropriate written instructions (collectivelyand customary transmittal materials, a “Transmittal Letter”) (which shall specify that delivery shall be effected, and risk of loss and title to the certificate certificates theretofore representing shares of Integrity United Stock prior to such Effective Time shall pass, only upon proper delivery of such certificates to the Exchange Agent and which shall be exchange agent in such form as United and FNB shall mutually agree shall be mailed on the Mailing Date (as defined below) to each shareholder of record of United. The “Mailing Date” shall be the date on which proxy materials relating to the Merger are mailed to holders of shares of United Stock. (b) Each Election Form shall entitle the holder of shares of United Stock (or the beneficial owner through appropriate and customary documentation and instructions) to (i) elect to receive the Cash Consideration for all of such holder’s shares (a “Cash Election”), (ii) elect to receive the Stock Consideration for all of such holder’s shares (a “Stock Election”), (iii) elect to receive Merger Consideration in accordance with clause (C) of the first sentence of Section E.1 (a “Mixed Election”), or (iv) make no election or to indicate that such holder has no preference as to the receipt of the Cash Consideration or the Stock Consideration (a “Non-Election”). Shareholders of record of United who hold shares of United Stock as nominees, trustees or in other representative capacities may submit multiple Election Forms, provided that such representative certifies that each such Election Form covers all the shares of United Stock held by that representative for a particular beneficial owner. Shares of United Stock in respect of which a Cash Election shall have been made are referred to herein as “Cash Election Shares.” Shares of United Stock in respect of which a Stock Election shall have been made are referred to herein as “Stock Election Shares.” Shares of United Stock in respect of which no election shall have been made are referred to as “Non-Election Shares.” The aggregate number of shares of United Stock with respect to which a Stock Election shall have been made is referred to herein as the “Stock Election Number.” Shares of United Stock with respect to which a Mixed Election shall have been made shall not be deemed either Stock Election Shares or Cash Election Shares, but shall in all events be converted into the right to receive the Merger Consideration as specified in subsection (e) of this Section E.4. (c) To be effective, a properly completed Election Form shall be submitted to the exchange agent on or before 5:00 p.m. North Carolina time on the last business day prior to the date on which the shareholders of United meet to vote upon this Plan of Merger (or such other provisions time and date as United and FNB may reasonably specifymutually agree) (the “Election Deadline”). After An election shall have been properly made only if the exchange agent shall have actually received a properly completed Election Form by the Election Deadline. An Election Form shall be deemed properly completed only if accompanied by one or more certificates (or customary affidavits and, if required by FNB pursuant to Section E.8, indemnification regarding the loss or destruction of such certificates or the guaranteed delivery of such certificates) representing all shares of United Stock covered by such Election Form, together with duly executed transmittal materials included with the Election Form. Any United shareholder may at any time prior to the Election Deadline change his or her election by written notice received by the exchange agent prior to the Election Deadline accompanied by a properly completed and signed revised Election Form. Any United shareholder may, at any time prior to the Election Deadline, revoke his or her election by written notice received by the exchange agent prior to the Election Deadline or by withdrawal prior to the Election Deadline of his or her certificates, or of the guarantee of delivery of such certificates, previously deposited with the exchange agent. All elections shall be revoked automatically if the exchange agent is notified in writing by FNB and United that the Agreement and Plan of Merger, dated as of May 9, 2005, by and between FNB and United (the “Merger Agreement”) has been terminated. If a United shareholder either (i) does not submit a properly completed Election Form by the Election Deadline, or (ii) revokes its Election Form prior to the Election Deadline, the shares of United Stock held by such shareholder shall be designated Non-Election Shares. FNB shall cause the certificates representing United Stock described in clause (ii) above to be promptly returned without charge to the person submitting the Election Form upon written request to that effect from the person who submitted the Election Form. Subject to the terms of this Plan and of the Election Form, the exchange agent shall have reasonable discretion to determine whether any election, revocation or change has been properly or timely made and to disregard immaterial defects in any Election Form, and any good faith decisions of the exchange agent regarding such matters shall be binding and conclusive. (d) Notwithstanding any other provision contained in this Plan, 65% (the “Stock Conversion Number”) of the total number of shares of United Stock outstanding at the Effective Time to be converted into Merger Consideration pursuant to Section E.1(a) excluding such shares as may be subject to an effective Mixed Election (the “Adjustable Conversion Shares”), shall be converted into the Stock Consideration and the remaining Adjustable Conversion Shares shall be converted into the Cash Consideration (in each case, excluding shares of United Stock to be canceled as provided in Section E.1 and Dissenting Shares); provided, however, that for federal income tax purposes, it is intended that the Merger will qualify as a reorganization under the provisions of Section 368(a) of the Code and, notwithstanding anything to the contrary contained herein, in order that the Merger will not fail to satisfy continuity of interest requirements under applicable federal income tax principles relating to reorganizations under Section 368(a) of the Code, as reasonably determined by counsel to FNB, FNB shall increase the number of Adjustable Conversion Shares that will be converted into the Stock Consideration and reduce the number of Adjustable Conversion Shares that will be converted into the right to receive the Cash Consideration. (e) Within five business days after the later to occur of the Election Deadline or the Effective Time, FNB shall cause the exchange agent to effect the allocation among holders of United Stock of rights to receive the Cash Consideration and the Stock Consideration as follows: (i) In any event, all shares of United Stock with respect to which a Mixed Election shall have been made shall be converted into 35% of the amount of cash set forth in clause (A) of the first sentence of Section 1.5(a) and 65% of the Exchange Ratio; (ii) If the Stock Election Number exceeds the Stock Conversion Number, then all Cash Election Shares and all Non-Election Shares shall be converted into the right to receive the Cash Consideration, and each holder of Stock Election Shares will be entitled to receive the Stock Consideration in respect of that number of Stock Election Shares equal to the product obtained by multiplying (x) the number of Stock Election Shares held by such holder by (y) a fraction, the numerator of which is the Stock Conversion Number and the denominator of which is the Stock Election Number, with the remaining number of such holder’s Stock Election Shares being converted into the right to receive the Cash Consideration; and (iii) If the Stock Election Number is less than the Stock Conversion Number (the amount by which the Stock Conversion Number exceeds the Stock Election Number being referred to herein as the “Shortfall Number”), then all Stock Election Shares shall be converted into the right to receive the Stock Consideration and the Non-election Shares and Cash Election Shares shall be treated in the following manner: (A) If the Shortfall Number is less than or equal to the number of Non-Election Shares, then all Cash Election Shares shall be converted into the right to receive the Cash Consideration and each holder of Non-Election Shares shall receive the Stock Consideration in respect of that number of Non-Election Shares equal to the product obtained by multiplying (x) the number of Non-Election Shares held by such holder by (y) a fraction, the numerator of which is the Shortfall Number and the denominator of which is the total number of Non-Election Shares, with the remaining number of such holder’s Non-Election Shares being converted into the right to receive the Cash Consideration; or (B) If the Shortfall Number exceeds the number of Non-Election Shares, then all Non-Election Shares shall be converted into the right to receive the Stock Consideration, and each holder of Cash Election Shares shall receive the Stock Consideration in respect of that number of Cash Election Shares equal to the product obtained by multiplying (x) the number of Cash Election Shares held by such holder by (y) a fraction, the numerator of which is the amount by which (1) the Shortfall Number exceeds (2) the total number of Non-Election Shares and the denominator of which is the total number of Cash Election Shares, with the remaining number of such holder’s Cash Election Shares being converted into the right to receive the Cash Consideration. For purposes of this Section E.4(e), if FNB is obligated to increase the number of Adjustable Conversion Shares to be converted into shares of FNB Stock as a result of the application of the last clause of Section E.4(d) above, then the higher number shall be the Stock Conversion Number in the calculations set forth in this Section E.4(e). 5. Each holder of a certificate representing shares of United Stock to be converted or exchanged in the Merger shall surrender such certificate for cancellation, and after the Effective Time and upon the proper surrender of certificate(s) representing shares of Integrity Stock to the Exchange Agentafter such surrender, together with a properly completed and duly executed Transmittal Letter, the holder of such certificate(s) shall be entitled to receive in exchange therefor the number of consideration to which it is entitled under this Plan. Until so surrendered, each outstanding certificate that prior to the Effective Time represented shares of FNB United Stock and the cash to which such holder is entitled hereunder (including any cash payments to which such holder is entitled hereunder in respect of rights to receive fractional shares and any dividends or other distributions to which such holder is entitled pursuant to Section E.6 below), subject to any required withholding of applicable taxes. Neither FNB nor the Exchange Agent shall be obligated deemed for all purposes to deliver any evidence ownership of the consideration to be issued and paid for the conversion or exchange of such payments in cash or stock until such holder surrenders the certificate(s) representing such holder’s sharesshares under this Plan. 6. The certificate(s) so surrendered shall be duly endorsed as the Exchange Agent may require. If there is a transfer of ownership of any shares of Integrity Stock not registered in the transfer records of Integrity, the Merger Consideration shall be issued to the transferee thereof if the certificates representing such Integrity Stock are presented to the Exchange Agent, accompanied by all documents required, in the reasonable judgment of FNB From and the Exchange Agent, to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid. Any portion of the Exchange Fund that remains undistributed to the holders of certificates representing Integrity Stock for six months after the Effective Time of the Merger, there shall be delivered to FNB, upon demand, and any shareholders of Integrity who have not previously complied with the provisions of this Plan of Merger shall thereafter look only to FNB for payment of their claim for FNB Stock and cash and any dividends or distributions with respect to FNB Stock. Any portion of the Exchange Fund remaining unclaimed by holders of Integrity Stock five years after the Effective Time (or such earlier date immediately prior to such time as such portion would otherwise escheat to or become property of any government entity) shall, to the extent permitted by applicable law, become the property of FNB free and clear of any claims or interest of any person previously entitled therein. Any other provision of this Agreement notwithstanding, neither FNB nor the Exchange Agent shall be liable to any holder of shares of Integrity Stock for any amounts paid or properly delivered in good faith to a public official pursuant to any applicable abandoned property law. 6. At the Effective Time, no further transfers on the stock transfer books of Integrity United of the shares of United Stock that were outstanding immediately prior to the Effective Time of the Merger. If after such Effective Time, certificates representing shares of United Stock are presented to United, FNB or the exchange agent for any reason, they shall be closed canceled and exchanged as provided for herein. 7. Notwithstanding any other provision of this Plan to holders the contrary, shares of Integrity United Stock that are outstanding immediately prior to the Effective Time and no transfer that are held by shareholders who shall have not voted in favor of Integrity Stock by any the Merger or consented thereto in writing and who properly shall have demanded appraisal for such holder shall thereafter be made or recognized. Until surrendered for exchange shares in accordance with Article 13 of the provisions of Section E.5 aboveNorth Carolina Business Corporation Act (collectively, each certificate theretofore representing shares of Integrity Stock (other than shares to be canceled pursuant to Section E.1 abovethe “Dissenting Shares”) shall from and after the Effective Time not be converted into or represent for all purposes only the right to receive the Merger Consideration. If, after the Effective Time, certificates representing Integrity Stock are presented to FNB or the Exchange Agent for any reason, they shall be cancelled and exchanged as provided in this Plan of Merger. To the extent permitted by North Carolina law, former Such shareholders of record of Integrity instead shall be entitled to vote after receive payment of the Effective Time at any meeting appraised value of shareholders of FNB the number of whole such shares of FNB Stock into which their respective shares of Integrity Stock are converted, regardless of whether such holders have exchanged their certificates representing Integrity Stock for certificates representing FNB Stock held by them in accordance with the provisions of this Agreement. Whenever a dividend Article 13 of the North Carolina Business Corporation Act, except that all Dissenting Shares held by shareholders who shall have failed to perfect or other distribution is declared by FNB on who effectively shall have withdrawn or otherwise lost their rights to appraisal of such shares under Article 13 of the FNB StockNorth Carolina Business Corporation Act shall thereupon be deemed to have been converted into and to have become exchangeable, the record date for which is at or after as of the Effective Time, for the declaration shall include dividends right to receive, without any interest thereon, the Merger Consideration upon surrender in the manner provided in Section 1.8 of the certificate or other distributions on all shares of FNB Stock to be issued pursuant to the Mergercertificates that, but beginning at the Effective Time no dividend or other distribution payable to the holders of record of FNB Stock as of any time subsequent immediately prior to the Effective Time Time, evidenced such shares. United shall be delivered to the holder give FNB (i) prompt notice of any certificate representing written demands for appraisal of any shares of Integrity Stock issued and outstanding at the Effective Time until such holder surrenders such certificate for exchange as provided in Section E.5 above; providedUnited Stock, however, that upon surrender attempted withdrawals of such Integrity Stock certificate demands for appraisal or any other instruments served pursuant to Article 13 of the North Carolina Business Corporation Act and received by United relating to shareholders’ rights of appraisal, and (or compliance with Section E.7 below), ii) the FNB Stock certificate, together with opportunity to participate in all undelivered dividends or other distributions (without interest) negotiations and any cash payments to be paid for fractional share interests (without interest), shall be delivered and paid proceedings with respect to each share represented by such Integrity Stock certificate. 7demands under Article 13 of the North Carolina Business Corporation Act consistent with the obligations of United thereunder. Any shareholder of Integrity whose certificate representing shares of Integrity Stock has been lostUnited shall not, destroyed, stolen or otherwise is missing shall be entitled to receive a certificate representing the shares of FNB Stock and/or any cash, including cash in lieu of fractional shares, to which he or she is entitled in accordance with and upon compliance with conditions reasonably imposed by the exchange agent or FNB (including, without limitation, a requirement that the shareholder provide a lost instruments indemnity bond in form, substance and amount reasonably satisfactory to the exchange agent and FNB).except

Conversion and Exchange of Shares. 1. At As of the Effective Time, all rights by virtue of Integrity’s shareholders with respect to all then outstanding the Merger and without any action on the part of any holder of any shares of the common stock of Integritystock, $1.00 par value $.0001 per share share, of Network (“Integrity Stock”the "Network Common"), Network, or IXC: (a) All shares of Network Common which are held by Network, if any, shall be canceled and retired and shall cease to exist, exist and the holders no stock of Integrity Stock IXC or other consideration shall cease to be, and shall have no further rights as, shareholders of Integritybe delivered in exchange therefor. At the Effective Time, each such outstanding Each share of Integrity Stock (except for shares heldcommon stock, other than in a fiduciary capacity or as a result par value $.01 per share, of debts previously contracted, by Integrity, FNB or any of their subsidiaries, which Acquisition shall be canceled in the Merger) shall and retired and be converted exclusively into the right to receive $5.20 in cash, without interest, and a number of shares one share of the Surviving Corporation's common stock of FNB, par value $2.50 per share stock. (the “FNB Stock”), equal to the product of 1.1209 (the “Exchange Ratio”b) and 0.78. The amount of cash into which shares of Integrity Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to Except as “Cash Consideration,” and the number of shares of FNB Stock into which shares of Integrity Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to as “Stock Consideration.” The Cash Consideration and Stock Consideration are sometimes referred to herein collectively as the “Merger Consideration.” No share of Integrity Stock shall be deemed to be outstanding or have any rights other than those set forth in this Section E.1 after the Effective Time. [The Exchange Ratio is subject to possible adjustment in accordance with Sections 1.5(c) and 8.2(c) of the Agreement and Plan of Merger2.1(a), dated as of September 18, 2005, by and between FNB and Integrity. If so adjusted, the adjusted Exchange Ratio shall be reflected in this Plan of Merger prior to filing with the Secretary of State of North Carolina.] 2. Each each share of the FNB Stock Network Common issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive 0.2998 shares (the "Exchange Ratio") of common stock, par value $.01 per share, of IXC (the Merger shall continue "IXC Common") (the "Share Consideration"). (c) All warrants or rights to be purchase shares of Network Common issued and outstanding and shall not be affected by the Merger. 3. Notwithstanding any other provision of this Plan of Merger, each holder of shares of Integrity Stock exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of FNB Stock (after taking into account all certificates delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional part of a share of FNB Stock multiplied by the market value of one share of FNB Stock upon the Effective Time. The market value of one share of FNB Stock at the Effective Time shall be the last sale price of FNB Stock on Nasdaq Stock Market, Inc. National Market System as reported by The Wall Street Journal or, if not reported thereby, any other authoritative source selected by FNB, on the last trading day preceding the Effective Time. No such holder will be entitled to dividends, voting rights, or any other rights as a shareholder in respect of any fractional shares. 4. As of the Effective Time, FNB shall deposit, or shall cause to be deposited, with Registrar and Transfer Company, in its capacity as the transfer agent of FNB Stock (the “Exchange Agent”), for the benefit of each holder of Integrity Stock for exchange in accordance with this Plan of Merger, (i) certificates representing the aggregate number of whole shares of FNB Stock to be issued as Stock Consideration, and (ii) the aggregate amount of cash to be delivered to holders of Integrity Stock as Cash Consideration and in lieu of any fractional shares, to be issued and paid pursuant to this Plan of Merger for outstanding shares of Integrity Stock (such certificates for shares of FNB Stock and such cash are referred to as the “Exchange Fund”). The Exchange Agent shall, pursuant to irrevocable instructions in accordance with this Plan of Merger, deliver the FNB Stock and cash contemplated to be issued with respect to Integrity Stock out of the Exchange Fund. The Exchange Fund shall not be used for any other purpose. The Exchange Agent shall invest any cash included in the Exchange Fund, as directed by FNB, on a daily basis. Any interest and other income resulting from such investments shall be paid to FNB. 5. After the Effective Time, FNB shall cause the Exchange Agent to mail to the shareholders of Integrity of record at the Effective Time transmittal materials and other appropriate written instructions (collectively, a “Transmittal Letter”) (which shall specify that delivery shall be effected, and risk of loss and title to the certificate representing shares of Integrity Stock prior to such Effective Time shall pass, only upon proper delivery of such certificates to the Exchange Agent and which shall be in such form and have such other provisions as FNB may reasonably specify). After the Effective Time and upon the proper surrender of certificate(s) representing shares of Integrity Stock to the Exchange Agent, together with a properly completed and duly executed Transmittal Letter, the holder of such certificate(s) shall be entitled to receive in exchange therefor the number of shares of FNB Stock and the cash to which such holder is entitled hereunder (including any cash payments to which such holder is entitled hereunder in respect of rights to receive fractional shares and any dividends or other distributions to which such holder is entitled pursuant to Section E.6 below), subject to any required withholding of applicable taxes. Neither FNB nor the Exchange Agent shall be obligated to deliver any of such payments in cash or stock until such holder surrenders the certificate(s) representing such holder’s shares. The certificate(s) so surrendered shall be duly endorsed as the Exchange Agent may require. If there is a transfer of ownership of any shares of Integrity Stock not registered in the transfer records of Integrity, the Merger Consideration shall be issued to the transferee thereof if the certificates representing such Integrity Stock are presented to the Exchange Agent, accompanied by all documents required, in the reasonable judgment of FNB and the Exchange Agent, to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid. Any portion of the Exchange Fund that remains undistributed to the holders of certificates representing Integrity Stock for six months after the Effective Time shall be delivered to FNB, upon demand, and any shareholders of Integrity who have not previously complied with the provisions of this Plan of Merger shall thereafter look only to FNB for payment of their claim for FNB Stock and cash and any dividends or distributions with respect to FNB Stock. Any portion of the Exchange Fund remaining unclaimed by holders of Integrity Stock five years after the Effective Time (or such earlier date immediately prior to such time as such portion would otherwise escheat to or become property of any government entity) shall, to the extent permitted by applicable law, become the property of FNB free and clear of any claims or interest of any person previously entitled therein. Any other provision of this Agreement notwithstanding, neither FNB nor the Exchange Agent shall be liable to any holder of shares of Integrity Stock for any amounts paid or properly delivered in good faith to a public official pursuant to any applicable abandoned property law. 6. At the Effective Time, the stock transfer books of Integrity shall be closed as to holders of Integrity Stock immediately prior to the Effective Time and no transfer of Integrity Stock by any such holder (the "Warrants") shall thereafter be made or recognized. Until surrendered for exchange in accordance with the provisions of Section E.5 above, each certificate theretofore representing shares of Integrity Stock (other than shares to be canceled pursuant to Section E.1 above) shall from and after the Effective Time represent for all purposes only converted into the right to receive an option (a "New Warrant") to acquire shares of IXC Common equal to the number of shares of Network Common subject to purchase under such Warrant multiplied by the Exchange Ratio (the "Warrant Consideration"). Each New Warrant shall, other than to reflect the application of the Exchange Ratio, contain terms and conditions as are substantially similar to the terms and conditions as the Warrant exchanged therefor. The Warrant Consideration and the Share Consideration are referred to together herein as the "Merger Consideration". (d) Notwithstanding Section 2.1(b) and (c), no fractional share of IXC Common shall be issued in the Merger, whether as a part of the Share Consideration or Warrant Consideration. IfIn lieu thereof, after any person who would have received a fractional share of less than one-half will have such fractional share rounded down to the prior whole share number and any person who would have received a fractional share of one-half or more shall have such fractional share rounded up to the next whole share number. If the application of the Exchange Ratio to any Warrant would result in a New Warrant being issued to acquire any fractional share, such fractional share shall likewise be rounded up or down, as applicable. (e) Network acknowledges and represents that 313,000 shares of Network Common issued to ▇▇▇▇▇▇▇ ▇▇▇▇ and held in escrow are included in the 13,393,678 shares of Network Common outstanding and that any release of such shares from such escrow, whether to ▇▇. ▇▇▇▇, Network, or the Surviving Corporation, will have no effect whatsoever on the Exchange Ratio. (f) In the event of any reclassification, recapitalization or stock split with respect to IXC Common (or if a record date with respect to any of the foregoing should occur) prior to the Effective Time, certificates representing Integrity Stock are presented to FNB or the Exchange Agent for any reasonappropriate and proportionate adjustments, they shall be cancelled and exchanged as provided in this Plan of Merger. To the extent permitted by North Carolina law, former shareholders of record of Integrity shall be entitled to vote after the Effective Time at any meeting of shareholders of FNB the number of whole shares of FNB Stock into which their respective shares of Integrity Stock are converted, regardless of whether such holders have exchanged their certificates representing Integrity Stock for certificates representing FNB Stock in accordance with the provisions of this Agreement. Whenever a dividend or other distribution is declared by FNB on the FNB Stock, the record date for which is at or after the Effective Time, the declaration shall include dividends or other distributions on all shares of FNB Stock to be issued pursuant to the Merger, but beginning at the Effective Time no dividend or other distribution payable to the holders of record of FNB Stock as of any time subsequent to the Effective Time shall be delivered to the holder of any certificate representing shares of Integrity Stock issued and outstanding at the Effective Time until such holder surrenders such certificate for exchange as provided in Section E.5 above; provided, however, that upon surrender of such Integrity Stock certificate (or compliance with Section E.7 below), the FNB Stock certificate, together with all undelivered dividends or other distributions (without interest) and any cash payments to be paid for fractional share interests (without interest)if any, shall be delivered made to the Exchange Ratio and paid with respect all references to each share represented by such Integrity Stock certificate. 7. Any shareholder of Integrity whose certificate representing shares of Integrity Stock has been lost, destroyed, stolen or otherwise is missing the Exchange Ratio in this Agreement shall be entitled deemed to receive a certificate representing be the shares of FNB Stock and/or any cash, including cash in lieu of fractional shares, to which he or she is entitled in accordance with and upon compliance with conditions reasonably imposed by the exchange agent or FNB (including, without limitation, a requirement that the shareholder provide a lost instruments indemnity bond in form, substance and amount reasonably satisfactory to the exchange agent and FNB)Exchange Ratio as so adjusted.

Conversion and Exchange of Shares. 1. At Except as otherwise provided herein, at the Effective Time, all rights of Integrity’s Home Savings's shareholders with respect to all then outstanding shares of the common stock of IntegrityHome Savings, par value $1.00 par value per share (“Integrity "Home Savings Stock”") shall cease to exist, and the holders of Integrity Home Savings Stock shall cease to be, and shall have no further rights as, shareholders of IntegrityHome Savings. At the Effective Time, each such outstanding share of Integrity Home Savings Stock (except for shares held, other than in a fiduciary capacity or as a result of debts previously contractedcapacity, by IntegrityHome Savings, FNB or any of their subsidiaries, which shall be canceled in the Merger) shall be converted exclusively into the right to receive $5.20 in cashconverted, without interest, and any action on the part of the holder of such shares (other than the making of an election as described in Section E.4 below) into (i) a number of shares of the common stock of FNB, par value $2.50 per share (the “"FNB Stock”"), equal to the product of 1.1209 (x) $15.50 (the “Exchange Ratio”"Cash Factor") and 0.78. The amount of cash into which shares of Integrity Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to divided by (y) the Average Closing Price (as “Cash Consideration,” and the number of shares of FNB Stock into which shares of Integrity Stock shall be converted pursuant to this Plan of Merger is sometimes hereinafter referred to as “Stock Consideration.” The Cash Consideration and Stock Consideration are sometimes referred to herein collectively as the “Merger Consideration.” No share of Integrity Stock shall be deemed to be outstanding or have any rights other than those set forth in this Section E.1 after the Effective Time. [The Exchange Ratio is subject to possible adjustment in accordance with Sections 1.5(cdefined below) and 8.2(c) of the Agreement and Plan of Merger, dated as of September 18, 2005, by and between FNB and Integrity. If so adjusted, the adjusted Exchange Ratio shall be reflected in this Plan of Merger prior to filing with the Secretary of State of North Carolina.] 2. Each share of the FNB Stock issued and outstanding immediately prior to the Effective Time of the Merger shall continue to be issued and outstanding and shall not be affected by the Merger. 3. Notwithstanding any other provision of this Plan of Merger, each holder of shares of Integrity Stock exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of FNB Stock (after taking into account all certificates delivered by such holdernumber of shares, the "Exchange Ratio"), (ii) shall receive, in lieu thereof, the right to receive cash (without interest) in an amount equal to such fractional part of a the Cash Factor per share of FNB Stock multiplied by the market value of one share of FNB Stock upon the Effective Time. The market value of one share of FNB Stock at the Effective Time shall be the last sale price of FNB Stock on Nasdaq Stock Market, Inc. National Market System as reported by The Wall Street Journal or, if not reported thereby, any other authoritative source selected by FNB, on the last trading day preceding the Effective Time. No such holder will be entitled to dividends, voting rightsHome Savings Stock, or any other rights as (iii) a shareholder in respect of any fractional shares. 4. As of the Effective Time, FNB shall deposit, or shall cause to be deposited, with Registrar and Transfer Company, in its capacity as the transfer agent of FNB Stock (the “Exchange Agent”), for the benefit of each holder of Integrity Stock for exchange in accordance with this Plan of Merger, (i) certificates representing the aggregate number of whole shares of FNB Stock to be issued as Stock Consideration, and (ii) the aggregate amount of cash to be delivered to holders of Integrity Stock as Cash Consideration and in lieu of any fractional shares, to be issued and paid pursuant to this Plan of Merger for outstanding shares of Integrity Stock (such certificates for shares of FNB Stock and such cash are referred to as the “Exchange Fund”). The Exchange Agent shall, pursuant to irrevocable instructions in accordance with this Plan of Merger, deliver the FNB Stock and cash contemplated to be issued with respect to Integrity Stock out of the Exchange Fund. The Exchange Fund shall not be used for any other purpose. The Exchange Agent shall invest any cash included in the Exchange Fund, as directed by FNB, on a daily basis. Any interest and other income resulting from such investments shall be paid to FNB. 5. After the Effective Time, FNB shall cause the Exchange Agent to mail to the shareholders of Integrity of record at the Effective Time transmittal materials and other appropriate written instructions (collectively, a “Transmittal Letter”) (which shall specify that delivery shall be effected, and risk of loss and title to the certificate representing shares of Integrity Stock prior to such Effective Time shall pass, only upon proper delivery of such certificates to the Exchange Agent and which shall be in such form and have such other provisions as FNB may reasonably specify). After the Effective Time and upon the proper surrender of certificate(s) representing shares of Integrity Stock to the Exchange Agent, together with a properly completed and duly executed Transmittal Letter, the holder of such certificate(s) shall be entitled to receive in exchange therefor the number combination of shares of FNB Stock and the cash to which such holder is entitled hereunder (including any cash payments to which such holder is entitled hereunder in respect of rights right to receive fractional shares and any dividends or other distributions to which such holder is entitled pursuant to Section cash as provided in Sections E.4 through E.6 below). For purposes hereof, subject "Average Closing Price" shall mean the average "Closing Price" of FNB Stock over the period of twenty (20) consecutive trading days ending on the trading day that is three trading days prior to any required withholding the date on which the closing of applicable taxesthe Merger takes place, and "Closing Price" shall mean the sum of the reported closing "bid" price and seventy-five (75%) of the spread between the reported closing "bid" and "ask" price of FNB Stock on the National Association of Securities Dealers Automated Quotations Inc. ("NASDAQ") National Market each day during such twenty (20) day period. Neither FNB nor Except as otherwise provided herein, the Exchange Agent shall be obligated to deliver any form of such payments in cash or stock until such holder surrenders the certificate(s) representing such holder’s shares. The certificate(s) so surrendered shall be duly endorsed as the Exchange Agent may require. If there is a transfer of ownership of any consideration into which each individual shareholder's shares of Integrity Home Savings Stock not registered will be converted will be determined in the transfer records of Integrity, the Merger Consideration shall be issued manner described in Sections E.4 through E.6 below. Notwithstanding anything contained herein to the transferee thereof contrary, if during the certificates representing such Integrity Stock are presented to period commencing on the Exchange Agent, accompanied by all documents required, in the reasonable judgment of FNB and the Exchange Agent, to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid. Any portion of the Exchange Fund that remains undistributed to the holders of certificates representing Integrity Stock for six months after the Effective Time shall be delivered to FNB, upon demand, and any shareholders of Integrity who have not previously complied with the provisions of this Plan of Merger shall thereafter look only to FNB for payment of their claim for FNB Stock and cash and any dividends or distributions with respect to FNB Stock. Any portion of the Exchange Fund remaining unclaimed by holders of Integrity Stock five years after the Effective Time (or such earlier date immediately prior to such time as such portion would otherwise escheat to or become property of any government entity) shall, to the extent permitted by applicable law, become the property of FNB free and clear of any claims or interest of any person previously entitled therein. Any other provision of this Agreement notwithstanding, neither FNB nor the Exchange Agent shall be liable to any holder of shares of Integrity Stock for any amounts paid or properly delivered in good faith to a public official pursuant to any applicable abandoned property law. 6. At and ending at the Effective Time, the stock transfer books Home Savings declares or pays cash dividends in an aggregate amount in excess of Integrity shall be closed as to holders of Integrity Stock immediately prior to $.30 per share ($.40 per share if the Effective Time and no transfer of Integrity Stock by any such holder shall thereafter be made or recognized. Until surrendered for exchange in accordance with the provisions of Section E.5 above, each certificate theretofore representing shares of Integrity Stock (other than shares to be canceled pursuant to Section E.1 above) shall from and is after the Effective Time represent for all purposes only the right to receive the Merger Consideration. If, after the Effective Time, certificates representing Integrity Stock are presented to FNB or the Exchange Agent for any reason, they shall be cancelled and exchanged as provided in this Plan of Merger. To the extent permitted by North Carolina law, former shareholders of record of Integrity shall be entitled to vote after the Effective Time at any meeting of shareholders of FNB the number of whole shares of FNB Stock into which their respective shares of Integrity Stock are converted, regardless of whether such holders have exchanged their certificates representing Integrity Stock for certificates representing FNB Stock in accordance with the provisions of this Agreement. Whenever a dividend or other distribution is declared by FNB on the FNB Stock, the record date for which is at FNB's regularly scheduled dividend for the first calendar quarter of 1998) or after the Effective Time, the declaration shall include dividends or makes any other distributions on all shares Home Savings Stock (collectively, the "Excess Cash Distributions"), then, for purposes of FNB Stock to this Agreement, the Cash Factor shall be issued pursuant to reduced by the Merger, but beginning at the Effective Time no dividend or other distribution payable to the holders of record of FNB Stock as per share amount of any time subsequent to such Excess Cash Distributions, and the Effective Time Exchange Ratio shall be delivered to the holder of any certificate representing shares of Integrity Stock issued and outstanding at the Effective Time until such holder surrenders such certificate for exchange as provided in Section E.5 above; provided, however, that upon surrender of such Integrity Stock certificate (or compliance with Section E.7 below), the FNB Stock certificate, together with all undelivered dividends or other distributions (without interest) and any cash payments to be paid for fractional share interests (without interest), shall be delivered and paid with respect to each share represented by such Integrity Stock certificatereduced accordingly. 7. Any shareholder of Integrity whose certificate representing shares of Integrity Stock has been lost, destroyed, stolen or otherwise is missing shall be entitled to receive a certificate representing the shares of FNB Stock and/or any cash, including cash in lieu of fractional shares, to which he or she is entitled in accordance with and upon compliance with conditions reasonably imposed by the exchange agent or FNB (including, without limitation, a requirement that the shareholder provide a lost instruments indemnity bond in form, substance and amount reasonably satisfactory to the exchange agent and FNB).