GREEN STREET FINANCIAL CORP
241 Green Street
Fayetteville, North Carolina 28301
September 6, 1996
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Green Street
Financial Corp (the "Company"), I cordially invite you to attend a Special
Meeting of Stockholders ("Meeting") to be held at the offices of the Company,
located at 241 Green Street, Fayetteville, North Carolina on Thursday, October
17, 1996 at 5:15 p.m. local time. The attached Notice of Special Meeting and
Proxy Statement describe the formal business to be transacted at the Special
Meeting.
We wish to share some good news with you as we complete our first five
months of operations from the completion of the mutual to stock conversion of
Home Federal Savings and Loan Association of Fayetteville.
At the monthly meeting held on August 28, 1996, the Board of Directors of
Green Street Financial Corp unanimously approved three items as discussed below:
o Dividends - - - We approved our regular quarterly $0.10 per share cash
dividend, and also an additional $0.15 per share special dividend payable
on October 25, 1996 to stockholders of record as of the close of business
on October 11, 1996. The fiscal year for the Company ends on September 30,
1996 and the directors have voted to pay this special dividend at the end
of the fiscal year. These dividends are being paid as a result of
continued profitability of the Company and its wholly owned subsidiary,
Home Federal Savings and Loan Association.
o Stock Repurchase Program - - - Pending the approval of the Office of
Thrift Supervision, we intend to implement a stock repurchase plan. Such
plan will provide for the repurchase of up to 5% of the Company's common
stock in the open market during the time period from October 21, 1996 to
April 4, 1997. Such repurchases will depend on the Company's
profitability, the market price of the common stock, and availability of
such stock.
o Dividend Reinvestment Plan - - - In January 1997, our stockholders will be
offered a convenient opportunity to purchase additional stock through the
reinvestment of the quarterly dividends. You will receive in a separate
mailing before the end of the year all of the details of the reinvestment
plan, and how you may enroll in the plan. This plan is completely
voluntary on your part.
We believe these three programs, (the regular and special dividend, the stock
repurchase plan and the dividend reinvestment plan) will improve the long term
investment value of your stock.
<PAGE>
The matters to be considered by stockholders at the Meeting are described
in the accompanying Notice of Special Meeting and Proxy Statement. The Board of
Directors of the Company has determined that the matters to be considered at the
Meeting are in the best interest of the Company and its stockholders. For the
reasons set forth in the Proxy Statement, the Board of Directors unanimously
recommends a vote "FOR" each matter to be considered.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID RETURN
ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you from voting in
person at the Meeting, but will assure that your vote is counted if you are
unable to attend the Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/ H.D. Reaves, Jr.
H.D. Reaves, Jr.
President
<PAGE>
GREEN STREET FINANCIAL CORP
241 Green Street
Fayetteville, North Carolina 28301
(910) 483-3681
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be Held on October 17, 1996
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the "Meeting") of
Green Street Financial Corp (the "Company") will be held at the offices of the
Company, located at 241 Green Street, Fayetteville, North Carolina on October
17, 1996 at 5:15 p.m. local time. A proxy card and a proxy statement for the
Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon the following
matters:
1. The approval of the Green Street Financial Corp 1996 Stock Option
Plan (the "1996 Stock Option Plan" or "Option Plan"); and
2. The approval of the Home Federal Savings and Loan Association
Restricted Stock Plan and Trust Agreement (the "Restricted Stock
Plan" or "RSP").
The transaction of such other business as may properly come before the
Meeting or any adjournments thereof may also be acted upon. If necessary, the
Meeting will be adjourned to solicit additional proxies with respect to approval
of the 1996 Stock Option Plan and the Restricted Stock Plan. The Board of
Directors is not aware of any other business to come before the Meeting.
Action may be taken on any one of the foregoing proposals at the Meeting
on the date specified above, or on any date or dates to which, by original or
later adjournment, the Meeting may be adjourned. Pursuant to the Company's
Bylaws, the Board of Directors has fixed the close of business on August 26,
1996, as the record date for determination of the stockholders entitled to vote
at the Meeting and any adjournments thereof.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT
DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY A STOCKHOLDER
MAY BE REVOKED BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION
OR A DULY EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE
MEETING MAY REVOKE HIS OR HER PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT
BEFORE THE MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT
REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR
RECORD HOLDER TO VOTE IN PERSON AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Allen Lloyd
Allen Lloyd
Secretary
Fayetteville, North Carolina
September 6, 1996
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
<PAGE>
PROXY STATEMENT
OF
GREEN STREET FINANCIAL CORP
241 Green Street
Fayetteville, North Carolina 28301
(910) 483-3681
SPECIAL MEETING OF STOCKHOLDERS
October 17, 1996
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Green Street Financial Corp (the "Company")
to be used at a Special Meeting of Stockholders of the Company to be held at the
offices of the Company, located at 241 Green Street, Fayetteville, North
Carolina on October 17, 1996, at 5:15 p.m. local time (the "Meeting"). The
accompanying Notice of Special Meeting of Stockholders and this Proxy Statement
are being first mailed to stockholders on or about September 6, 1996. The
Company is the parent company of Home Federal Savings and Loan Association (the
"Association"). The Company was formed as a North Carolina corporation in
December 1995 at the direction of the Association to acquire all of the
outstanding stock of the Association issued in connection with the Association's
mutual-to-stock conversion completed on April 3, 1996 (the "Conversion").
At the Meeting, stockholders will consider and vote upon (i) the approval
of the Green Street Financial Corp 1996 Stock Option Plan (the "1996 Stock
Option Plan" or "Option Plan"), and (ii) the approval of the Association's
Restricted Stock Plan and Trust Agreement (the "Restricted Stock Plan" or
"RSP"). The Board of Directors knows of no additional matters that will be
presented for consideration at the Meeting. Execution of a proxy, however,
confers on the designated proxyholder the discretionary authority to vote the
shares represented by such proxy in accordance with their best judgment on such
other business, if any, that may properly come before the Meeting or any
adjournment thereof.
"Proposal I - Approval of the 1996 Stock Option Plan" provides for
authorizing the issuance of an additional 429,812 shares of common stock of the
Company ("Common Stock") upon the exercise of stock options to be awarded to
officers, directors, key employees and other persons providing services to the
Company or any present or future parent or subsidiary of the Company from time
to time. "Proposal II - Approval of the Restricted Stock Plan and Trust"
provides for authorization to issue up to an additional 171,925 shares of Common
Stock upon awards to personnel of experience and ability in key positions of
responsibility with the Association and its subsidiaries from time to time. At
the present time, the Association intends to acquire such Common Stock for RSP
purposes through open-market purchases. The RSP has the authority, however, to
buy such Common Stock directly from the Company. Approval of Proposal I and
Proposal II may be deemed to have certain anti-takeover effects with regard to
the Company. See "Proposal I -- Approval of the 1996 Stock Option Plan Effect of
Merger and Other Adjustments, and -Possible Dilutive Effects of the Option Plan"
and "Proposal II -- Approval of the Restricted Stock Plan - Possible Dilutive
Effects of RSP."
<PAGE>
VOTING AND REVOCABILITY OF PROXIES
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address above or by the filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a stockholder attends the Meeting and
votes in person. Proxies solicited by the Board of Directors will be voted in
accordance with the directions given therein. Where no instructions are
indicated, signed proxies will be voted "FOR" Proposal I and "FOR" Proposal II
at the Meeting or any adjournment thereof.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Employees, officers, and directors of the Company have an interest in
certain matters being presented for stockholder approval. Upon stockholder
approval, employees, officers, and directors of the Company may be granted stock
options and restricted stock awards pursuant to the 1996 Stock Option Plan and
the Restricted Stock Plan. The approval of the 1996 Stock Option Plan and the
RSP are being presented as Proposal I and Proposal II, respectively. See "Voting
Securities and Principal Holders Thereof" for information regarding the number
of shares of Common Stock beneficially owned by executive officers and
directors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on August 26, 1996 (the
"Voting Record Date"), are entitled to one vote for each share of Common Stock
then held. As of the Voting Record Date, the Company had 4,298,125 shares of
Common Stock issued and outstanding.
The Articles of Incorporation of the Company ("Articles of Incorporation")
provides that in no event shall any record owner of any outstanding Common Stock
which is beneficially owned, directly or indirectly, by a person who
beneficially owns in excess of 10% of the then outstanding shares of Common
Stock (the "Limit") be entitled or permitted to any vote with respect to the
shares held in excess of the Limit. Beneficial ownership is determined pursuant
to the definition in the Articles of Incorporation and includes shares
beneficially owned by such person or any of his or her affiliates or associates
(as such terms are defined in the Articles of Incorporation), shares which such
person or his or her affiliates or associates have the right to acquire upon the
exercise of conversion rights or options, and shares as to which such person and
his or her affiliates or associates have or share investment or voting power,
but shall not include shares beneficially owned by any employee stock ownership
plan or similar plan of the issuer or any subsidiary.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit, if any) is necessary to constitute a quorum
at the Meeting. With respect to any matter, any shares for which a broker
indicates on the proxy that it does not have discretionary authority as to such
shares to vote on such matter (the "Broker Non-Votes") will not be considered
present for purposes of determining whether a quorum is
-2-
<PAGE>
present. In the event there are not sufficient votes for a quorum or to ratify
any proposals at the time of the Meeting, the Meeting may be adjourned in order
to permit the further solicitation of proxies.
As to matters being proposed for stockholder action as set forth in
Proposal I and Proposal II, the proxy being provided by the Board of Directors
enables a stockholder to check the appropriate box on the proxy to (i) vote
"FOR" the item, (ii) vote "AGAINST" the item, or (iii) vote to "ABSTAIN" on such
item. An affirmative vote of the holders of a majority of the total votes
eligible to be cast at the Meeting, in person or by proxy, is required to
constitute stockholder approval for each of Proposals I and II. Broker
Non-Votes, shares as to which the "ABSTAIN" box is selected on the proxy, and
shares for which no vote is cast will have the effect of a vote against the
matter.
Persons and groups owning in excess of 5% of the Common Stock are required
to file certain reports regarding such ownership pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"). The following table sets
forth, as of the Voting Record Date, persons or groups who own more than 5% of
the Common Stock. Other than as noted below, management knows of no person or
group that owns more than 5% of the outstanding shares of Common Stock at the
Voting Record Date.
<TABLE>
<CAPTION>
Percent of Shares of
Amount and Nature of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------ -------------------- --------------------
Home Federal Savings and Loan Association
Employee Stock Ownership Plan and Trust ("ESOP")
241 Green Street
<S> <C> <C>
Fayetteville, North Carolina 28301 260,000(1) 6.0%
The Shelton Companies
3600 One First Union Center
301 S. College Street
Charlotte, NC 28202 227,600(2) 5.30%
</TABLE>
- ---------------------------------
(1) The ESOP purchased such shares for the exclusive benefit of plan
participants with funds borrowed from the Company. These shares are held
in a suspense account and will be allocated among ESOP participants
annually on the basis of compensation as the ESOP debt is repaid. The
Board of Directors has appointed a committee consisting of Robert O.
McCoy, Jr., Henry G. Hutaff, Sr. and Henry W. Holt to serve as the ESOP
administrative committee ("ESOP Committee") and the ESOP trustees ("ESOP
Trustee"). The ESOP Committee or the Board instructs the ESOP Trustee
regarding investment of ESOP plan assets. The ESOP Trustee must vote all
shares allocated to participant accounts under the ESOP as directed by
participants. Unallocated shares and shares for which no timely voting
direction is received, will be voted by the ESOP Trustee as directed by
the Board of the Company or the ESOP Committee. As of the Voting Record
Date, 6,500 shares have been allocated under the ESOP to participant
accounts.
(2) Based upon Schedule 13D filings with the Securities and Exchange
Commission on behalf of the Shelton Companies, the Shelton Foundation,
Third Set, Inc., Charles M. Shelton, Jr., Jennifer K. Shelton, and Jane P.
Norward, such entities and individuals as a group hold 227,600 shares of
Common Stock representing 5.30 percent of the outstanding Common Stock for
investment purposes.
-3-
<PAGE>
The following table sets forth the amount of Common Stock beneficially
owned by each director, each of the named executive officers of the Company, and
all directors and executive officers of the Company as a group as of the Voting
Record Date.
<TABLE>
<CAPTION>
Common Stock Beneficially
Owned (1)(2)(3)
Name of Individual or -------------------------
Number of Persons in Group Title Shares %
- -------------------------- ------------- ---------------- --------
<S> <C> <C> <C>
H.D. Reaves, Jr. President, Chief 7,000 (5)
Executive Officer
and Director
Robert O. McCoy, Jr. Chairman of the Board 8,200(4) (5)
Henry G. Hutaff, Sr. Director and Vice Chairman 30,000(4) (5)
of the Board
Norwood E. Bryan, Jr. Director 40,000 (5)
John M. Grantham Director and Senior Vice- 15,300 (5)
President
Joseph H. Hollinshed Director 15,000 (5)
Henry W. Holt Director 26,830(4) (5)
John C. Pate Director and Senior Vice- 6,001 (5)
President
Robert G. Ray Director 4,900 (5)
Allen Lloyd Secretary 500 (5)
Jerry Robertson Vice President and Treasurer 750 (5)
All executive officers
and directors (11 persons) 154,471(4) 3.59%
======= ====
</TABLE>
- -----------------------------
(1) Beneficial ownership as of August 26, 1996. Includes shares of Common
Stock held directly as well as by spouses or minor children, in trust, and
other indirect ownership, over which shares the individuals effectively
exercise sole or shared voting and investment power, unless otherwise
indicated.
(2) Excludes proposed stock options to purchase shares of Common Stock
pursuant to the 1996 Stock Option Plan, the granting of which are subject
to stockholder approval of the 1996 Stock Option Plan and are not
exercisable within 60 days of the Voting Record Date. See "Proposal I
Approval of the 1996 Stock Option Plan."
(3) Excludes shares of Common Stock proposed to be awarded under the RSP, the
granting of which are subject to stockholder approval of the Restricted
Stock Plan. See "Proposal II - Approval of the Restricted Stock Plan."
(4) Excludes 260,000 shares of Common Stock held under the ESOP for which such
individual serves as either a member of the ESOP Committee or as an ESOP
Trustee. Such individual disclaims beneficial ownership with respect to
shares held in a fiduciary capacity. The ESOP Trustee must vote all shares
allocated to participant accounts under the ESOP as directed by ESOP
participants. Unallocated shares and shares for which no timely voting
direction is received will be voted by the ESOP Trustee as directed by the
Board of the Company or the ESOP Committee. As of the Voting Record Date,
6,500 shares have been allocated under the ESOP to participant accounts.
(5) Represents ownership of less than 1.0% of the Common Stock outstanding.
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
Directors' Compensation
Directors Fees. The directors of the Company do not presently receive
compensation for their services as a director of the Company. Such directors
receive compensation for services as members of
-4-
<PAGE>
the Board of Directors of the Association. For the fiscal year 1995, each
non-employee director of the Association received a monthly fee of $700, and
$200 for each meeting attended. Each member of the Executive, Compensation,
Loan, and Audit Committees received $100 for attendance at each committee
meeting. For the fiscal year ended September 30, 1995, total fees paid by the
Association to directors were $99,270.
Future Stock Awards. Directors will receive awards of stock options and
restricted stock under the 1996 Stock Option Plan and the RSP upon stockholder
approval of these plans. See "Proposal I -- Approval of the 1996 Stock Option
Plan" and "Proposal II -- Approval of the Restricted Stock Plan and Trust"
herein.
Executive Compensation
Summary Compensation Table. The following table sets forth the
compensation paid to the chief executive officer during the fiscal year ended
September 30, 1995. All compensation paid to directors, officers and employees
is paid by the Association. No other executive officer received cash
compensation in excess of $100,000 during the fiscal year ended September 30,
1995.
<TABLE>
<CAPTION>
Annual Compensation (1)
- ----------------------------------------------------------------------
All
Name and Other Annual Other
Principal Position Year Salary Bonus Compensation (2) Compensation
- ------------------ ---- ------- ------ ---------------- ------------
<S> <C> <C> <C> <C> <C>
H.D. Reaves, Jr., 1995 $96,000 $9,650 -- --
President
</TABLE>
(1) The Company first issued Common Stock registered under Section 12(g) of
the 1934 Act effective April 3, 1996, therefore, less than three years of
compensation data is presented. All compensation set forth above was paid
by the Association.
(2) For the fiscal year 1995, there were no (a) perquisites over the lesser of
$50,000 or 10% of the named executive officer's total salary and bonuses
for the year; (b) payments of above-market preferential earnings on
deferred compensation; (c) payments of earnings with respect to long term
incentive plans prior to settlement or maturity; (d) tax payment
reimbursements; or (e) preferential discounts on stock.
Employment and Severance Agreements. In April 1996, the Association entered
into an employment agreement with H.D.Reaves, Jr., President of the Association
("Agreement"). The Agreement has a three year term. Mr. Reaves' base
compensation under the Agreement is $97,800. Under the Agreement, Mr. Reaves'
employment may be terminated by the Association for "just cause" as defined in
the Agreement. If the Association terminates Mr. Reaves without just cause, Mr.
Reaves will be entitled to a continuation of his salary for a period of one year
thereafter. In the event of the termination of employment in connection with any
change in control of the Association during the term of the Agreement, Mr.
Reaves will be paid in a lump sum amount equal to 2.99 times the five year
average of his annual compensation. In the event of a change in control at
September 30, 1995, Mr. Reaves would have been entitled to a severance payment
of approximately $274,000. The Association also entered into employment
agreements with Messrs. Robertson and Lloyd, both serving as executive officers
of the Association, with terms similar to those contained in the agreement with
Mr. Reaves. Upon a change in control, severance payments to all executive
officers as a group as of September 30, 1995, would have totalled approximately
$619,000, including proposed payments to Mr. Reaves.
-5-
<PAGE>
Other Compensation
Employee Stock Ownership Plan. The Association maintains an employee stock
ownership plan ("ESOP") for the exclusive benefit of participating employees.
Participating employees are employees who have completed one year of service
with the Association and have attained the age of 21. The ESOP is funded by
contributions made by the Association of cash or Common Stock. The ESOP borrowed
funds from the Company with which to acquire 260,000 shares of the Common Stock
issued in the Conversion, representing 6.0% of the Common Stock outstanding. The
loan is secured by the shares purchased and earnings of ESOP assets. Shares
purchased with such loan proceeds will be held in a suspense account for
allocation among participants as the loan is repaid. The Association anticipates
contributing approximately $260,000 annually to the ESOP to meet principal
obligations under the ESOP loan, plus accrued interest expense payable to the
Company. This loan is expected to be fully repaid in approximately 10 years. For
the fiscal year 1995, the Association recognized no expense attributable to the
ESOP.
The Board of Directors has appointed Robert O. McCoy, Jr., Henry G.
Hutaff, Sr. and Henry W. Holt of the Association to serve as the ESOP Trustee.
The ESOP Committee administers the ESOP, and its members consist of the same
individuals as the ESOP Trustee. The Board of Directors or the ESOP Committee
may instruct the ESOP Trustee regarding investments of funds contributed to the
ESOP. The ESOP Trustee must vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees. Unallocated
shares and allocated shares for which no timely direction is received will be
voted by the ESOP Trustee as directed by the Board of Directors or the ESOP
Committee, subject to the Trustee's fiduciary duties. At September 30, 1995, no
shares were allocated under the ESOP to participants. As of June 30, 1996, 6,500
shares were allocated under the ESOP to participants.
Pension Plan. The Association maintains a pension plan for the benefit of
its employees (the "Pension Plan"). Any employee who became an employee before
July 1, 1995 is eligible to participate in the Pension Plan on the first day of
the month coinciding with or next following his or her first day of employment
with the Association. Any employee who became an employee after July 1, 1995 is
eligible to participate on the July 1 or January 1 coinciding with or next
following his or her completion of one year of eligible service. A qualifying
employee becomes fully vested in the Pension Plan upon completion of five years
of qualifying service. The Pension Plan is intended to comply with the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
The Pension Plan provides for monthly payments or a lump sum payment to
each participating employee at normal retirement age. Upon termination at or
after age 65 and completion of 30 or more years of service, the annual
retirement benefit would be determined based upon 45% of a participant's Final
Average Compensation. Retirement benefits may be paid after age 55, in which
case such benefits shall be reduced by an early retirement factor. Retirement
benefits at age 65 with less than 30 years of service are also reduced
proportionately. The Pension Plan also provides for payments in the event of
disability or death. At September 30, 1995, Mr. Reaves, President, had 33 years
of credited service under the Pension Plan. Pension expenses for the fiscal
years ended 1995 and 1994 were $112,542, and $85,992, respectively.
The following table shows the estimated annual benefits payable under the
Pension Plan based on the respective employee's years of benefit service and
applicable average annual salary, as calculated on the basis of single life
annuity amounts under the Pension Plan. Benefits under the Pension Plan are not
subject to offset for Social Security benefits.
-6-
<PAGE>
Average Annual Salary Years of Benefit Service
- --------------------- ------------------------------------------------
20 25 30 or more
----------- ----------- --------------
$ 20,000............... $ 6,000 $ 7,500 $ 9,000
40,000............... 12,000 15,000 18,000
60,000............... 18,000 22,500 27,000
80,000............... 24,000 30,000 36,000
100,000............... 30,000 37,500 45,000
120,000............... 36,000 45,000 54,000
150,000............... 45,000 56,250 67,500
1996 Stock Option Plan. The Board of Directors of the Company has adopted
the 1996 Stock Option Plan for the benefit of its directors, officers, and key
employees. The 1996 Stock Option Plan is subject to stockholder approval. See
"Proposal I - Approval of the 1996 Stock Option Plan" for a summary of the 1996
Stock Option Plan. See Exhibit A for a copy of the 1996 Stock Option Plan.
Restricted Stock Plan. The Board of Directors of the Company has adopted a
restricted stock program for the benefit of personnel of experience and ability
in key positions of responsibility with the Association. The RSP is subject to
stockholder approval. See "Proposal II - Approval of the Restricted Stock Plan
and Trust" for a summary of the RSP. See Exhibit B for a copy of the Restricted
Stock Plan.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Association during the fiscal year ended
September 30, 1995 consisted of non-employee Directors Hollinshed, Holt and
McCoy.
Certain Relationships and Related Transactions
No directors, executive officers, or immediate family members of such
individuals were engaged in transactions with the Association or any subsidiary
involving more than $60,000 during the year ended September 30, 1995.
Furthermore, the Association had no "interlocking" relationships existing during
the year ended September 30, 1995 in which (i) any executive officer is a member
of the Board of Directors/Trustees of another entity, one of whose executive
officers is a member of the Association's Board of Directors, or where (ii) any
executive officer is a member of the compensation committee of another entity,
one of whose executive officers is a member of the Association's Board of
Directors. Robert G. Ray, Esq., is a director of the Company and the
Association. He is also a member of the law firm of Rose, Ray, Winfrey, O'Connor
& Leslie, which firm provides legal services to the Association.
The Association, like many financial institutions, has followed a policy of
granting various types of loans to officers, directors, and employees. All loans
to executive officers and directors of the Association have been made in the
ordinary course of business and on substantially the same terms and conditions,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with the Association's other customers, and do not
involve more than the normal risk of collectibility nor present other
unfavorable features. All loans by the Association to its directors and
executive officers are subject to regulations of the Office of Thrift
Supervision ("OTS") restricting loans and other transactions with affiliated
persons of the Association.
-7-
<PAGE>
PROPOSAL I -- APPROVAL OF THE 1996 STOCK OPTION PLAN
General
The Company's Board of Directors has adopted the 1996 Stock Option Plan.
The Option Plan is subject to approval by the Company's stockholders and any
necessary regulatory approvals. Pursuant to the Option Plan, up to 429,812
shares of Common Stock equal to up to 10% of the total Common Stock issued in
the Conversion are to be reserved under the Company's authorized but unissued
shares for issuance by the Company upon exercise of stock options to be granted
to officers, directors, key employees and other persons from time to time. The
purpose of the Option Plan is to attract and retain qualified personnel for
positions of substantial responsibility and to provide additional incentive to
certain officers, directors, key employees and other persons to promote the
success of the Company's and the Association's business. The Option Plan, which
shall become effective upon the date of stockholder approval ("Effective Date"),
provides for a term of ten years, after which no awards may be made. The
following summary of the material features of the Option Plan is qualified in
its entirety by reference to the complete provisions of the Option Plan which is
attached hereto as Exhibit A.
The Option Plan will be administered by the Board of Directors or a
committee of not less than two non-employee directors appointed by the Company's
Board of Directors and serving at the pleasure of the Board (the "Option
Committee"). Members of the Option Committee shall be deemed "Non- Employee
Directors" within the meaning of Rule 16b-3 pursuant to the 1934 Act. Directors
McCoy, Hutaff and Holt serve as members of the Option Committee. The Option
Committee may select the officers and employees to whom options are to be
granted and the number of options to be granted based upon several factors
including prior and anticipated future job duties and responsibilities, job
performance, the Association's financial performance and a comparison of awards
given by other institutions which have converted from mutual to stock form. A
majority of the members of the Option Committee shall constitute a quorum and
the action of a majority of the members present at any meeting at which a quorum
is present shall be deemed the action of the Option Committee.
Officers, directors, key employees and other persons who are designated by
the Option Committee will be eligible to receive, at no cost to them, options
under the Option Plan (the "Optionees"). Each option granted pursuant to the
Option Plan shall be evidenced by an instrument in such form as the Option
Committee shall from time to time approve. It is anticipated that options
granted under the Option Plan will constitute either Incentive Stock Options
(options that afford favorable tax treatment to recipients upon compliance with
certain restrictions pursuant to Section 422 of the Internal Revenue Code
("Code") and that do not normally result in tax deductions to the Company) or
Non- Incentive Stock Options (options that do not afford recipients favorable
tax treatment under Code Section 422). Option shares may be paid for in cash,
shares of Common Stock, or a combination of both. The Company will receive no
monetary consideration for the granting of stock options under the Option Plan.
Further, the Company will receive no consideration other than the option
exercise price per share for Common Stock issued to Optionees upon the exercise
of those Options.
Options to be awarded to employees, officers, and directors shall be
conditioned upon receipt of stockholder approval of the Option Plan. Options
awarded to employees, officers, and directors become first exercisable at a rate
of 20% annually commencing on the one year anniversary of the date of grant,
except upon the death or disability of the Optionee, or upon a change in control
of the Company. In the event of the death or disability of an Optionee, or a
change in control (as such term is described in the
-8-
<PAGE>
Option Plan), the options granted to such Optionee shall become immediately
exercisable without regard to any vesting schedule.
Shares issuable under the Option Plan may be from authorized but unissued
shares or shares purchased in the open market. An Option which expires, becomes
unexercisable, or is forfeited for any reason prior to its exercise will again
be available for issuance under the Option Plan. No Option or any right or
interest therein is assignable or transferable except by will or the laws of
descent and distribution. The Option Plan shall continue in effect for a term of
ten years from the Effective Date.
Stock Options
The Option Committee may grant either Incentive Stock Options or
Non-Incentive Stock Options. In general, if an Optionee ceases to serve as an
employee of the Company for any reason other than disability or death, an
exercisable Incentive Stock Option may continue to be exercisable for three
months but in no event after the expiration date of the option, except as may
otherwise be determined by the Option Committee at the time of the award. In the
event of the disability or death of an Optionee during employment, an
exercisable Incentive Stock Option will continue to be exercisable for one year
and two years, respectively, to the extent exercisable by the Optionee
immediately prior to the Optionee's disability or death but only if, and to the
extent that, the Optionee was entitled to exercise such Incentive Stock Options
on the date of termination of employment. The terms and conditions of
Non-Incentive Stock Options relating to the effect of an Optionee's termination
of employment or service, disability, or death shall be such terms as the Option
Committee, in its sole discretion, shall determine at the time of termination of
service, disability or death, unless specifically determined at the time of
grant of such options.
The exercise price for the purchase of Common Stock subject to an Option
may not be less than one hundred percent (100%) of the Fair Market Value of the
Common Stock covered by the Option on the date of grant of such Option. For
purposes of determining the Fair Market Value of the Common Stock, the exercise
price per share of the Option shall be not less than the mean between the last
bid and ask price on the date the Option is granted or, if there is no bid and
ask price on said date, then on the immediately prior business day on which
there was a bid and ask price. If no such bid and ask price is available, then
the exercise price per share shall be determined in good faith by the Option
Committee. The Option Committee may impose additional conditions upon the right
of an Optionee to exercise any Option granted hereunder which are not
inconsistent with the terms of the Option Plan or the requirements for
qualification as an Incentive Stock Option, if such Option is intended to
qualify as an incentive stock option.
No shares of Common Stock shall be issued upon the exercise of an Option
until full payment therefor has been received by the Company, and no Optionee
shall have any of the rights of a stockholder of the Company until shares of
Common Stock are issued to such Optionee, except to the extent that dividend
equivalent rights are awarded under the Option Plan. Upon the exercise of an
Option by an Optionee (or the Optionee's personal representative), the Option
Committee, in its sole and absolute discretion, may make a cash payment to the
Optionee, in whole or in part, in lieu of the delivery of shares of Common
Stock. Such cash payment to be paid in lieu of delivery of Common Stock shall be
equal to the difference between the Fair Market Value of the Common Stock on the
date of the Option exercise and the exercise price per share of the Option. Such
cash payment shall be in exchange for the cancellation of such Option. Such cash
payment shall not be made in the event that such transaction would result in
liability to the Optionee and the Company under Section 16(b) of the 1934 Act,
and regulations promulgated thereunder.
-9-
<PAGE>
The Option Plan provides that the Board of Directors of the Company may
authorize the Option Committee to direct the execution of an instrument
providing for the modification, extension or renewal of any outstanding option,
provided that no such modification, extension or renewal shall confer on the
Optionee any right or benefit which could not be conferred on the Optionee by
the grant of a new Option at such time, and shall not materially decrease the
Optionee's benefits under the Option without the Optionee's consent, except as
otherwise provided under the Option Plan.
Awards Under the Option Plan
The Board or the Option Committee shall from time to time determine the
officers, Directors, key employees and other persons who shall be granted Awards
under the Plan, the number of Awards to be granted to any Participant under the
Plan, and whether Awards granted to each such Participant under the Plan shall
be Incentive Stock Options and/or Non-Incentive Stock Options. In selecting
Participants and in determining the number of shares of Common Stock subject to
Options to be granted to each such Participant, the Board or the Option
Committee may consider the nature of the past and anticipated future services
rendered by each such Participant, each such Participant's current and potential
contribution to the Company and such other factors as may be deemed relevant.
Participants who have been granted an Award may, if otherwise eligible, be
granted additional Awards. In no event shall Shares subject to Options granted
to non-employee Directors in the aggregate under this Plan exceed more than 30%
of the total number of Shares authorized for delivery under this Plan, and no
more than 5% of total Plan shares may be awarded to any individual non-employee
Director. In no event shall Shares subject to Options granted to any Employee
exceed more than 25% of the total number of Shares authorized for delivery under
the Plan.
Pursuant to the terms of the Option Plan, Non-Incentive Stock Options to
purchase 21,490 shares of Common Stock will be granted to each non-employee
Director of the Company, as of the Effective Date, at an exercise price equal to
the Fair Market Value of the Common Stock on such date of grant. Options may be
granted to newly appointed or elected non-employee Directors within the sole
discretion of the Option Committee, and the exercise price shall be equal to the
Fair Market Value of such Common Stock on the date of grant. The Options granted
to non-employee Directors on the Effective Date will be first exercisable
commencing on the one year anniversary of stockholder approval of the Option
Plan and 20% annually thereafter, during such period of service as a Director or
a Director Emeritus. Such Options granted to non-employee Directors will remain
exercisable for up to ten years from such date of grant. Upon the death or
disability of a Director or Director Emeritus, such Options shall be deemed
immediately 100% exercisable for their remaining term.
All outstanding option awards shall become immediately exercisable in the
event of a change in control of the Company or the Association, provided such
accelerated vesting is not inconsistent with applicable OTS regulations or other
appropriate banking regulations at the time of such change in control. Subject
to vesting requirements, if applicable, except in the event of death or
disability of the Optionee, a minimum of six months must elapse between the date
of the grant of an Option and the date of the sale of the Common Stock received
through the exercise of such Option.
-10-
<PAGE>
The table below presents information related to stock option awards
anticipated to be awarded upon stockholder approval of the Option Plan, subject
to OTS non-objection, if applicable.
<TABLE>
<CAPTION>
NEW PLAN BENEFIT
1996 STOCK OPTION PLAN
----------------------
Number of Options
Name and Position Dollar Value(1) to be Granted
- ----------------- --------------- -----------------
Robert O. McCoy, Jr.
<S> <C> <C>
Chairman of the Board ............. N/A 21,490
H. D. Reaves
Director, President and CEO........ N/A 98,857
Henry G. Hutaff, Sr.
Director and Vice Chairman of the Board N/A 21,490
Norwood E. Bryan, Jr.
Director........................... N/A 21,490
John M. Grantham
Director and Senior Vice-President. N/A 51,577
Joseph H. Hollinshed
Director........................... N/A 21,490
Henry W. Holt
Director........................... N/A 21,490
John C. Pate
Director and Senior Vice-President. N/A 98,857
Robert G. Ray
Director........................... N/A 21,490
Jerry Robertson
Vice President and Treasurer....... N/A 21,490
Executive Officer Group (5 persons).. N/A 287,974(2)(3)
Non-Executive Director Group
(6 persons)........................ N/A 128,940(4)
Non-Executive Officer Employee Group. N/A 12,898(2)(3)
</TABLE>
- --------------------------------
(1) The exercise price of such Options shall be equal to the Fair Market Value
of the Common Stock on the date of stockholder approval of the Option
Plan. Accordingly, the dollar value of the options was not determinable
at the time of mailing this Proxy Statement. On August 26, 1996, the last
sale price of the Common Stock at the close of the market as reported on
the Nasdaq National Market was $14.00 per share. The Option Plan provides
that all Options granted to employees and directors as of the Effective
Date will have Dividend Equivalent Rights. See "-- Dividend Equivalent
Rights."
(2) Options awarded to officers and employees are exercisable as follows:
Options awarded at the time of stockholder approval are first exercisable
at the rate of 20% on the one year anniversary from the date of grant and
20% annually thereafter during periods of continued service as an
employee, Director or Director Emeritus. Such awards shall be 100%
exercisable in the event of death or disability, or upon a change in
control of the Company or the Association. Options awarded to employees
shall continue to be exercisable during continued service as an employee,
Director or Director Emeritus. Options not exercised within three months
of termination of service as an employee shall thereafter be deemed non-
incentive stock options.
-11-
<PAGE>
(3) Awards shall vest during periods of continued service as an employee,
director, or director emeritus. Upon vesting, awards shall remain
exercisable for ten years from the date of grant without regard to
continued service as an employee, director, or director emeritus.
(4) Options awarded to directors are first exercisable at a rate of 20% on the
one year anniversary of stockholder approval of the Option Plan and 20%
annually thereafter, during such period of service as a director or
director emeritus, and shall remain exercisable for ten years without
regard to continued service as a director or director emeritus. Upon
disability or death or a change in control of the Company or the
Association, such awards shall be 100% exercisable.
Dividend Equivalent Rights
The Committee, in its sole discretion, may include as a term of any
Option, the right of the Optionee to receive Dividend Equivalent Rights. Such
rights shall provide that upon the payment of a dividend on the Common Stock,
the holder of such Options shall receive payment of compensation in an amount
equivalent to the dividend payable as if such Options had been exercised and
such Common Stock held as of the dividend record date. Such rights shall expire
upon the expiration or exercise of such underlying Options. Such rights are
nontransferable and shall attach to Options whether or not such Options are
immediately exercisable. The dividend equivalent payments associated with
Options that are not yet immediately exercisable shall accrue and shall be held
in arrears. Such dividend equivalent payments held in arrears shall be
distributed to the Optionee upon the vesting of the related Option. All Options
granted by the Committee to Employees as of the Effective Date are intended to
have Dividend Equivalent Rights associated with such Options. All Options
granted to non-employee Directors of the Company or the Association as of the
Effective Date in accordance with the Plan are intended to have Dividend
Equivalent Rights associated with such Options. The inclusion in the Option Plan
of Dividend Equivalent Rights is subject to the non-objection of the OTS.
Effect of Mergers, Change of Control and Other Adjustments
Subject to any required action by the stockholders of the Company, within
the sole discretion of the Option Committee, the aggregate number of shares of
Common Stock for which Options may be granted hereunder or the number of shares
of Common Stock represented by each outstanding Option will be proportionately
adjusted for any increase or decrease in the number of issued and outstanding
shares of Common Stock resulting from a subdivision or consolidation of shares
or the payment of a stock dividend or any other increase or decrease in the
number of shares of Common Stock effected without the receipt or payment of
consideration by the Company. Subject to any required action by the stockholders
of the Company, in the event of any change in control, recapitalization, merger,
consolidation, exchange of shares, spin-off, reorganization, tender offer,
partial or complete liquidation or other extraordinary corporate action or
event, the Option Committee, in its sole discretion, shall have the power, prior
to or subsequent to such action or events, to (i) appropriately adjust the
number of shares of Common Stock subject to each Option, the exercise price per
share of such Option, and the consideration to be given or received by the
Company upon the exercise of any outstanding Options; (ii) cancel any or all
previously granted Options, provided that appropriate consideration is paid to
the Optionee in connection therewith; and/or (iii) make such other adjustments
in connection with the Option Plan as the Option Committee, in its sole
discretion, deems necessary, desirable, appropriate or advisable. However, no
action may be taken by the Option Committee which would cause Incentive Stock
Options granted pursuant to the Option Plan to fail to meet the requirements of
Section 422 of the Code without the consent of the Optionee. Upon the payment of
a special or non-recurring cash dividend that has the effect of a return of
capital to the stockholders, the Option exercise price per share shall be
adjusted proportionately, except to the extent that the Optionee shall otherwise
receive payments associated with
-12-
<PAGE>
Dividend Equivalent Rights attributable to such Options with regard to such
special or non-recurring cash dividends.
The Option Committee will at all times have the power to accelerate the
exercise date of all Options granted under the Option Plan. In the case of a
Change in Control of the Company as determined by the Option Committee, all
outstanding options shall become immediately exercisable (provided such
accelerated vesting is not inconsistent with applicable regulations of the OTS
or other appropriate banking regulator at the time of the Change in Control). A
change in control is defined to include (i) the sale of all, or a material
portion, of the assets of the Company; (ii) the merger or recapitalization of
the Company whereby the Company is not the surviving entity; (iii) a change in
control of the Company as otherwise defined or determined by the OTS or its
regulations; or (iv) the acquisition, directly or indirectly, of the beneficial
ownership (within the meaning of Section 13(d) of the 1934 Act and rules and
regulations promulgated thereunder) of 25% or more of the outstanding voting
securities of the Company by any person, trust, entity, or group. This
limitation shall not apply to the purchase of shares by underwriters in
connection with a pubic offering of Company stock or the purchase of shares of
up to 25% of any class of securities of the Company by a tax-qualified employee
stock benefit plan which is exempt from the approval requirements set forth
under 12 C.F.R. ss.574.3(c)(1)(vi).
In the event of such a Change in Control, the Option Committee and the
Board of Directors will take one or more of the following actions to be
effective as of the date of such Change in Control: (i) provide that such
Options shall be assumed, or equivalent options shall be substituted,
("Substitute Options") by the acquiring or succeeding corporation (or an
affiliate thereof), provided that: (A) any such Substitute Options exchanged for
Incentive Stock Options shall meet the requirements of Section 424(a) of the
Code, and (B) the shares of stock issuable upon the exercise of such Substitute
Options shall constitute securities registered in accordance with the Securities
Act of 1933, as amended, ("1933 Act") or such securities shall be exempt from
such registration in accordance with Sections 3(a)(2) or 3(a)(5) of the 1933
Act, (collectively, "Registered Securities"), or in the alternative, if the
securities issuable upon the exercise of such Substitute Options shall not
constitute Registered Securities, then the Optionee will receive upon
consummation of the Change in Control transaction a cash payment for each Option
surrendered equal to the difference between (1) the Fair Market Value of the
consideration to be received for each share of Common Stock in the Change in
Control transaction times the number of shares of Common Stock subject to such
surrendered Options, and (2) the aggregate exercise price of all such
surrendered Options, or (ii) in the event of a transaction under the terms of
which the holders of the Common Stock of the Company will receive upon
consummation thereof a cash payment (the "Merger Price") for each share of
Common Stock exchanged in the Change in Control transaction, to make or to
provide for a cash payment to the Optionees equal to the difference between (A)
the Merger Price times the number of shares of Common Stock subject to such
Options held by each Optionee (to the extent then exercisable at prices not in
excess of the Merger Price) and (B) the aggregate exercise price of all such
surrendered Options in exchange for such surrendered Options.
The power of the Option Committee to accelerate the exercise of Options
and the immediate exercisability of Options in the case of a Change in Control
of the Company could have an anti-takeover effect by making it more costly for a
potential acquiror to obtain control of the Company due to the higher number of
shares outstanding following such exercise of Options. The power of the Option
Committee to make adjustments in connection with the Option Plan, including
adjusting the number of shares subject to Options and canceling Options, prior
to or after the occurrence of an extraordinary corporate action, allows the
Option Committee to adapt the Option Plan to operate in changed circumstances,
to adjust the Option Plan to fit a smaller or larger company, and to permit the
issuance of Options to new management following such extraordinary corporate
action. However, this power of the Option Committee may also have an
anti-takeover effect, by allowing the Option Committee to adjust
-13-
<PAGE>
the Option Plan in a manner to allow the present management of the Company to
exercise more Options and hold more shares of the Company's Common Stock, and to
possibly decrease the number of Options available to new management of the
Company.
Although the Option Plan may have an anti-takeover effect, the Company's
Board of Directors did not adopt the Option Plan specifically for anti-takeover
purposes. The Option Plan could render it more difficult to obtain support for
stockholder proposals opposed by the Company's Board and management in that
recipients of Options could choose to exercise such Options and thereby increase
the number of shares for which they hold voting power. Also, the exercise of
such Options could make it easier for the Board and management to block the
approval of certain transactions requiring the voting approval of 80% of the
Common Stock in accordance with the Articles of Incorporation. In addition, the
exercise of such Options could increase the cost of an acquisition by a
potential acquiror.
Amendment and Termination of the Option Plan
The Board of Directors may alter, suspend or discontinue the Option Plan,
except that no action of the Board shall increase the maximum number of shares
of Common Stock issuable under the Option Plan, materially increase the benefits
accruing to Optionees under the Option Plan or materially modify the
requirements for eligibility for participation in the Option Plan unless such
action of the Board shall be subject to approval or ratification by the
stockholders of the Company.
Possible Dilutive Effects of the Option Plan
The Common Stock to be issued upon the exercise of Options awarded under
the Option Plan may either be authorized but unissued shares of Common Stock or
shares purchased in the open market. Because the stockholders of the Company do
not have preemptive rights, to the extent that the Company funds the Option
Plan, in whole or in part, with authorized but unissued shares, the interests of
current stockholders will be diluted. If upon the exercise of all of the
Options, the Company delivers newly issued shares of Common Stock (i.e., 429,812
shares of Common Stock), then the effect to current stockholders would be to
dilute their current ownership percentages by approximately 9.1%.
Federal Income Tax Consequences
Under present federal tax laws, awards under the Option Plan will have the
following consequences:
1. The grant of an Option will not by itself result in the recognition of
taxable income to an Optionee nor entitle the Company to a tax
deduction at the time of such grant.
2. The exercise of an Option which is an "Incentive Stock Option" within
the meaning of Section 422 of the Code generally will not, by itself,
result in the recognition of taxable income to an Optionee nor entitle
the Company to a deduction at the time of such exercise. However, the
difference between the Option exercise price and the Fair Market Value
of the Common Stock on the date of Option exercise is an item of tax
preference which may, in certain situations, trigger the alternative
minimum tax for an Optionee. An Optionee will recognize capital gain
or loss upon resale of the shares of Common Stock received pursuant to
the exercise of Incentive Stock Options, provided that such shares are
held for at least one year after transfer of the shares or two years
after the grant of the Option, whichever is later. Generally, if the
shares are not held for that period, the Optionee will recognize
ordinary income upon disposition in an amount equal
-14-
<PAGE>
to the difference between the Option exercise price and the Fair
Market Value of the Common Stock on the date of exercise, or, if
less, the sales proceeds of the shares acquired pursuant to the
Option.
3. The exercise of a Non-Incentive Stock Option will result in the
recognition of ordinary income by the Optionee on the date of
exercise in an amount equal to the difference between the exercise
price and the Fair Market Value of the Common Stock acquired
pursuant to the Option.
4. The Company will be allowed a tax deduction for federal tax purposes
equal to the amount of ordinary income recognized by an Optionee at
the time the Optionee recognizes such ordinary income, including the
receipt of cash paid related to Dividend Equivalent Rights.
Accounting Treatment
Neither the grant nor the exercise of an Option under the Option Plan
currently requires any charge against earnings under generally accepted
accounting principles. In certain circumstances, Common Stock issuable pursuant
to outstanding Options which are exercisable under the Option Plan might be
considered outstanding for purposes of calculating earnings per share on a fully
diluted basis.
Stockholder Approval
Stockholder approval of the Option Plan is being sought in accordance with
regulations of the OTS. Additional purposes of requesting stockholder approval
of the Option Plan are to qualify the Option Plan for the granting of Incentive
Stock Options in accordance with the Code, to enable Optionees to qualify for
certain exemptive treatment from the short-swing profit recapture provisions of
Section 16(b) of the 1934 Act, to meet the requirements for the
tax-deductibility of certain compensation items under Section 162(m) of the
Code, and to meet the requirements for continued listing of the Common Stock
under the Nasdaq National Market. An affirmative vote of the holders of a
majority of the total votes eligible to be cast at the Meeting is required to
constitute stockholder approval of this Proposal I.
THE OTS IN NO WAY ENDORSES OR APPROVES THE OPTION PLAN.
A VOTE IN FAVOR OF THE OPTION PLAN ALSO AUTHORIZES THE BOARD OF DIRECTORS
TO AMEND THE OPTION PLAN TO COMPLY WITH ANY FUTURE OTS INTERPRETATIONS UNDER
APPLICABLE REGULATIONS, PROVIDED ANY SUCH AMENDMENTS DO NOT HAVE A MATERIAL
ADVERSE EFFECT ON THE COMPANY'S STOCKHOLDERS AS A GROUP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE 1996
STOCK OPTION PLAN.
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<PAGE>
PROPOSAL II -- APPROVAL OF THE RESTRICTED
STOCK PLAN AND TRUST AGREEMENT
General
The Board of Directors of the Company has adopted the RSP as a method of
providing directors, officers, and key employees of the Association with a
proprietary interest in the Company in a manner designed to encourage such
persons to remain in the employment or service of the Association. The
Association will contribute sufficient funds to the RSP to purchase Common Stock
representing up to 4% of the aggregate number of shares issued in the Conversion
(i.e., 171,925 shares of Common Stock) in the open market, or alternatively, the
RSP may purchase authorized but unissued shares of Common Stock from the
Company. All of the Common Stock to be purchased by the RSP will be purchased at
the Fair Market Value of such stock on the date of purchase. Awards under the
RSP will be made in recognition of prior and expected future services to the
Association by its directors, officers and key employees responsible for
implementation of the policies adopted by the Association's Board of Directors
and as a means of providing a further retention incentive. The following is a
summary of the material features of the RSP which is qualified in its entirety
by reference to the complete provisions of the RSP which is attached hereto as
Exhibit B.
Awards Under the RSP
Benefits under the RSP ("Plan Share Awards") may be granted at the sole
discretion of a committee comprised of not less than two directors who are not
employees of the Association or the Company (the "RSP Committee") appointed by
the Association's Board of Directors. The RSP is managed by trustees (the "RSP
Trustees") who are non-employee directors of the Association or the Company and
who have the responsibility to invest all funds contributed by the Association
to the trust created for the RSP (the "RSP Trust"). Directors McCoy, Hutaff and
Holt have been appointed as the RSP Committee and RSP Trustees. Unless the terms
of the RSP or the RSP Committee specify otherwise, awards under the RSP will be
in the form of restricted stock payable as the Plan Share Awards shall be earned
and non-forfeitable. Twenty percent (20%) of such awards shall be earned and
non- forfeitable on the one year anniversary of the date of grant of such
awards, and 20% annually thereafter, provided that the recipient of the award
remains an employee, Director or Director Emeritus during such period. A
recipient of such restricted stock will not be entitled to voting rights
associated with such shares prior to the applicable date such shares are earned.
Dividends paid on Plan Share Awards shall be held in arrears and distributed
upon the date such applicable Plan Share Awards are earned. Any shares held by
the RSP Trust which are not yet earned shall be voted by the RSP Trustees, as
directed by the RSP Committee. If a recipient of such restricted stock
terminates employment or service for reasons other than death, disability, or a
change in control of the Company or the Association, the recipient forfeits all
rights to the awards under restriction. If the recipient's termination of
employment or service is caused by death, disability, or a change in control of
the Company or the Association (provided that such accelerated vesting is not
inconsistent with applicable regulations of the OTS or other appropriate banking
regulator at the time of such change in control), all restrictions expire and
all shares allocated shall become unrestricted. Awards of restricted stock to
directors shall be immediately non- forfeitable in the event of the death or
disability of such director, or a change in control of the Company or the
Association and distributed as soon as practicable thereafter. The Board of
Directors can terminate the RSP at any time, and if it does so, any shares not
allocated will revert to the Company.
-16-
<PAGE>
Plan Share Awards under the RSP will be determined by the RSP Committee.
In no event shall any Employee receive Plan Share Awards in excess of 25% of the
aggregate Plan Shares authorized under the Plan. Plan Share Awards may be
granted to newly elected or appointed non-employee Directors of the Association
subsequent to the effective date (as defined in the RSP) provided that the Plan
Share Awards made to non-employee Directors shall not exceed 30% of total Plan
Share Reserve in the aggregate under the Plan or 5% of the total Plan Share
Reserve to any individual non-employee Director.
The aggregate number of Plan Shares available for issuance pursuant to the
Plan Share Awards and the number of shares to which any Plan Share Award relates
shall be proportionately adjusted for any increase or decrease in the total
number of outstanding shares of Common Stock issued subsequent to the effective
date (as defined in the RSP) of the RSP resulting from any split, subdivision or
consolidation of the Common Stock or other capital adjustment, change or
exchange of Common Stock, or other increase or decrease in the number or kind of
shares effected without receipt or payment of consideration by the Company.
-17-
<PAGE>
The following table presents information related to the anticipated award
of Common Stock under the RSP as authorized pursuant to the terms of the RSP or
the anticipated actions of the RSP Committee.
<TABLE>
<CAPTION>
NEW PLAN BENEFITS
RESTRICTED STOCK PLAN
---------------------
Name and Position Dollar Value (1) Number of Shares (2)(3)
- ----------------- ---------------- -----------------------
Robert O. McCoy, Jr.
<S> <C> <C>
Chairman of the Board........ $ 120,344 8,596
H.D. Reaves, Jr.
Director, President and CEO.. $ 553,602 39,543
Henry G. Hutaff, Sr.
Director and Vice Chairman of
the Board.................... $ 120,344 8,596
Norwood E. Bryan, Jr.
Director..................... $ 120,344 8,596
John M. Grantham
Director and Senior Vice-President $ 288,834 20,631
Joseph H. Hollinshed
Director..................... $ 120,344 8,596
Henry W. Holt
Director..................... $ 120,344 8,596
John C. Pate
Director and Senior Vice-President $ 553,602 39,543
Robert G. Ray
Director..................... $ 120,344 8,596
Jerry Robertson
Vice President and Treasurer. $ 120,344 8,596
Executive Officer Group (5 persons) $1,612,660 115,190
Non-Executive Director
Group (6 persons)............ $ 722,064 51,576(4)
Non-Executive Officer Employee
Group.......................... $ 72,226 5,159
</TABLE>
- -------------------------
(1) These values are based on the last sale price of the Common Stock as
reported at the closing on the Nasdaq National Market on the Voting Record
Date, which was $14.00 per share. The exact dollar value of the Common
Stock granted will equal the market price of the Common Stock on the date
of vesting of such awards. Accordingly, the exact dollar value is not
presently determinable.
(2) All Plan Share Awards presented herein shall be earned at the rate of 20%
on the one year anniversary of stockholder approval of the RSP and 20%
annually thereafter. All awards shall become immediately 100% vested upon
death, disability, or termination of service following a change in control
(as defined in the RSP).
(3) Plan Share Awards shall continue to vest during periods of service as an
employee, director, or director emeritus.
(4) Each of six (6) non-employee directors shall be awarded 8,596 shares upon
the date of stockholder approval, subject to applicable vesting.
-18-
<PAGE>
Amendment and Termination of the Plan
The Board may amend or terminate the RSP at any time. However, no action
of the Board may increase the maximum number of Plan Shares permitted to be
awarded under the RSP, except for adjustments in the Common Stock of the
Company, materially increase the benefits accruing to Participants under the RSP
or materially modify the requirements for eligibility for participation in the
RSP unless such action of the Board shall be subject to ratification by the
stockholders of the Company.
Possible Dilutive Effects of RSP
The RSP provides that Common Stock to be awarded may be acquired by the
RSP through open-market purchases or from authorized but unissued shares of
Common Stock from the Company. In that stockholders do not have preemptive
rights, to the extent that the Company utilizes authorized but unissued shares
to fund RSP awards, the interests of current stockholders will be diluted. If
all Plan Share Awards are funded with newly issued shares, the effect on
existing stockholders would be to dilute their current ownership percentages by
approximately 3.9%. It is the Company's present intention to fund the RSP
through open-market purchases of Common Stock.
Federal Income Tax Consequences
Common Stock awarded under the RSP is generally taxable to the recipient
at the time that such awards become 100% vested and non-forfeitable, based upon
the Fair Market Value of such stock at the time of such vesting. Alternatively,
a recipient may make an election pursuant to Section 83(b) of the Code within 30
days of the date of the award to elect to include in gross income for the
current taxable year the Fair Market Value of such stock as of the date of the
award. Such election must be filed with the Internal Revenue Service within 30
days of the date of the granting of the stock award. The Company will be allowed
a tax deduction for federal tax purposes as a compensation expense equal to the
amount of ordinary income recognized by a recipient of Plan Share Awards at the
time the recipient recognizes taxable ordinary income. A recipient of a Plan
Share Award may elect to have a portion of such award withheld by the RSP Trust
in order to meet any necessary tax withholding obligations.
Accounting Treatment
For accounting purposes, the Company will recognize a compensation expense
in the amount of the Fair Market Value of the Common Stock subject to Plan Share
Awards at the date of the award pro rata over the period of years during which
the awards are earned.
Stockholder Approval
The Company is submitting the RSP to stockholders for approval in
accordance with regulations of the OTS. The RSP and awards made thereunder will
not be effective until receipt of stockholder approval of Proposal II.
Additional purposes of requesting stockholder approval of the RSP are to enable
recipients of Plan Share Awards to qualify for certain exemptive treatment from
the short-swing profit recapture provisions of Section 16(b) of the 1934 Act, to
meet the requirements for the tax deductibility of certain compensation items
under Section 162(m) of the Code, and to meet the requirements for continued
listing of the Common Stock on the Nasdaq National Market. The affirmative vote
of holders of a majority of the total votes eligible to be cast at the Meeting
is required to constitute stockholder approval of this Proposal II.
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THE OTS IN NO WAY ENDORSES OR APPROVES THE RSP.
A VOTE IN FAVOR OF THE RSP ALSO AUTHORIZES THE BOARD OF DIRECTORS TO AMEND
THE RSP TO COMPLY WITH ANY FUTURE OTS INTERPRETATIONS UNDER APPLICABLE
REGULATIONS, PROVIDED SUCH AMENDMENTS DO NOT HAVE A MATERIAL ADVERSE EFFECT ON
THE COMPANY'S STOCKHOLDERS AS A GROUP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
RESTRICTED STOCK PLAN.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Meeting, it is
intended that proxies in the accompanying form will be voted in respect thereof
in accordance with the judgment of the person or persons named in the
accompanying proxy.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
the Annual Meeting of Stockholders for the fiscal year ending September 30,
1996, any stockholder proposal to take action at such meeting must be received
at the Company's executive offices at 241 Green Street, Fayetteville, North
Carolina 28301, in accordance with 17 C.F.R. ss.240.14a-8 of the Rules and
Regulations under the 1934 Act. Any such proposals shall be subject to the
requirements of Rule 14a-8 under the 1934 Act.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without payment of additional
compensation. The Company has retained D.F. King & Co., Inc. to assist in the
solicitation of proxies at a cost which is not anticipated to exceed $2,500 plus
reimbursement of certain incurred expenses, however, actual expenses may exceed
estimated costs.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Allen Lloyd
Allen Lloyd
Secretary
Fayetteville, North Carolina
September 6, 1996
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Exhibit A
GREEN STREET FINANCIAL CORP
1996 STOCK OPTION PLAN
1. Purpose of the Plan. The Plan shall be known as the Green Street
Financial Corp ("Company") 1996 Stock Option Plan (the "Plan"). The purpose of
the Plan is to attract and retain qualified personnel for positions of
substantial responsibility and to provide additional incentive to officers,
directors, key employees and other persons providing services to the Company, or
any present or future parent or subsidiary of the Company to promote the success
of the business. The Plan is intended to provide for the grant of "Incentive
Stock Options," within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code") and Non-Incentive Stock Options, options that
do not so qualify. The provisions of the Plan relating to Incentive Stock
Options shall be interpreted to conform to the requirements of Section 422 of
the Code.
2. Definitions. The following words and phrases when used in this Plan with
an initial capital letter, unless the context clearly indicates otherwise, shall
have the meaning as set forth below. Wherever appropriate, the masculine pronoun
shall include the feminine pronoun and the singular shall include the plural.
(a) "Award" means the grant by the Committee of an Incentive Stock
Option or a Non-Incentive Stock Option, or any combination thereof, as provided
in the Plan.
(b) "Board" shall mean the Board of Directors of the Company, or any
successor or parent corporation thereto.
(c) "Change in Control" shall mean: (i) the sale of all, or a material
portion, of the assets of the Company; (ii) the merger or recapitalization of
the Company whereby the Company is not the surviving entity; (iii) a change in
control of the Company, as otherwise defined or determined by the Office of
Thrift Supervision or regulations promulgated by it; or (iv) the acquisition,
directly or indirectly, of the beneficial ownership (within the meaning of that
term as it is used in Section 13(d) of the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder) of twenty-five percent (25%)
or more of the outstanding voting securities of the Company by any person,
trust, entity or group. This limitation shall not apply to the purchase of
shares by underwriters in connection with a public offering of Company stock, or
the purchase of shares of up to 25% of any class of securities of the Company by
a tax-qualified employee stock benefit plan which is exempt from the approval
requirements, set forth under 12 C.F.R. ss.574.3(c)(1)(vi) as now in effect or
as may hereafter be amended. The term "person" refers to an individual or a
corporation, partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Committee as to whether a Change
in Control has occurred shall be conclusive and binding.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and regulations promulgated thereunder.
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(e) "Committee" shall mean the Board or the Stock Option Committee
appointed by the Board in accordance with Section 5(a) of the Plan.
(f) "Common Stock" shall mean the common stock of the Company, or any
successor or parent corporation thereto.
(g) "Continuous Employment" or "Continuous Status as an Employee"
shall mean the absence of any interruption or termination of employment with the
Company or any present or future Parent or Subsidiary of the Company. Employment
shall not be considered interrupted in the case of sick leave, military leave or
any other leave of absence approved by the Company or in the case of transfers
between payroll locations, of the Company or between the Company, its Parent,
its Subsidiaries or a successor.
(h) "Company" shall mean the Green Street Financial Corp, the parent
corporation of the Savings Association, or any successor or Parent thereof.
(i) "Director" shall mean a member of the Board of the Company, or any
successor or parent corporation thereto.
(j) "Director Emeritus" shall mean a person serving as a director
emeritus or other similar position as may be appointed by the Board of Directors
of the Savings Association or the Company from time to time.
(k) "Disability" means (a) with respect to Incentive Stock Options,
the "permanent and total disability" of the Employee as such term is defined at
Section 22(e)(3) of the Code; and (b) with respect to Non-Incentive Stock
Options, any physical or mental impairment which renders the Participant
incapable of continuing in the employment or service of the Savings Association
or the Parent in his then current capacity as determined by the Committee.
(l) "Dividend Equivalent Rights" shall mean the rights to receive a
cash payment in accordance with Section 12 of the Plan.
(m) "Effective Date" shall mean the date specified in Section 15
hereof.
(n) "Employee" shall mean any person employed by the Company or any
present or future Parent or Subsidiary of the Company.
(o) "Fair Market Value" shall mean: (i) if the Common Stock is traded
otherwise than on a national securities exchange, then the Fair Market Value per
Share shall be equal to the mean between the last bid and ask price of such
Common Stock on such date or, if there is no bid and ask price on said date,
then on the immediately prior business day on which there was a bid and ask
price. If no such bid and ask price is available, then the Fair Market Value
shall be determined by the Committee in good faith; or (ii) if the Common Stock
is listed on a national securities exchange, then the Fair Market Value per
Share shall be not less than the average of the highest and lowest selling price
of such Common Stock on such exchange on such date, or if there were no sales on
said date, then the Fair Market Value shall be not less than the mean between
the last bid and ask price on such date.
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(p) "Incentive Stock Option" or "ISO" shall mean an option to purchase
Shares granted by the Committee pursuant to Section 8 hereof which is subject to
the limitations and restrictions of Section 8 hereof and is intended to qualify
as an incentive stock option under Section 422 of the Code.
(q) "Non-Incentive Stock Option" or "Non-ISO" shall mean an option to
purchase Shares granted pursuant to Section 9 hereof, which option is not
intended to qualify under Section 422 of the Code.
(r) "Option" shall mean an Incentive Stock Option or Non-Incentive
Stock Option granted pursuant to this Plan providing the holder of such Option
with the right to purchase Common Stock.
(s) "Optioned Stock" shall mean stock subject to an Option granted
pursuant to the Plan.
(t) "Optionee" shall mean any person who receives an Option or Award
pursuant to the Plan.
(u) "Parent" shall mean any present or future corporation which would
be a "parent corporation" as defined in Sections 424(e) and (g) of the Code.
(v) "Participant" means any director, officer or key employee of the
Company or any Parent or Subsidiary of the Company or any other person providing
a service to the Company who is selected by the Committee to receive an Award,
or who by the express terms of the Plan is granted an Award.
(w) "Plan" shall mean the Green Street Financial Corp 1996 Stock
Option Plan.
(x) "Savings Association" shall mean Home Federal Savings and Loan
Association, Fayetteville, North Carolina, or any successor corporation thereto.
(y) "Share" shall mean one share of the Common Stock.
(z) "Subsidiary" shall mean any present or future corporation which
constitutes a "subsidiary corporation" as defined in Sections 424(f) and (g) of
the Code.
3. Shares Subject to the Plan. Except as otherwise required by the
provisions of Section 13 hereof, the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed 429,812 Shares.
Such Shares may either be from authorized but unissued shares or shares
purchased in the market for Plan purposes.
If an Award shall expire, become unexercisable, or be forfeited for any
reason prior to its exercise, new Awards may be granted under the Plan with
respect to the number of Shares as to which such expiration has occurred.
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4. Six Month Holding Period.
Subject to vesting requirements, if applicable, except in the event
of death or disability of the Optionee, a minimum of six months must elapse
between the date of the grant of an Option and the date of the sale of the
Common Stock received through the exercise of such Option.
5. Administration of the Plan.
(a) Composition of the Committee. The Plan shall be administered by
the Board of Directors of the Company or a Committee which shall consist of not
less than two Directors of the Company appointed by the Board and serving at the
pleasure of the Board. All persons designated as members of the Committee shall
meet the requirements of a "Non-Employee Director" within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934, as amended, as found at 17 CFR
ss.240.16b-3.
(b) Powers of the Committee. The Committee is authorized (but only to
the extent not contrary to the express provisions of the Plan or to resolutions
adopted by the Board) to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the administration of the Plan, and shall have and may exercise
such other power and authority as may be delegated to it by the Board from time
to time. A majority of the entire Committee shall constitute a quorum and the
action of a majority of the members present at any meeting at which a quorum is
present shall be deemed the action of the Committee. In no event may the
Committee revoke outstanding Awards without the consent of the Participant.
The President of the Company and such other officers as shall be
designated by the Committee are hereby authorized to execute written agreements
evidencing Awards on behalf of the Company and to cause them to be delivered to
the Participants. Such agreements shall set forth the Option exercise price, the
number of shares of Common Stock subject to such Option, the expiration date of
such Options, and such other terms and restrictions applicable to such Award as
are determined in accordance with the Plan or the actions of the Committee.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
6. Eligibility for Awards and Limitations.
(a) The Committee shall from time to time determine the officers,
Directors, key employees and other persons who shall be granted Awards under the
Plan, the number of Awards to be granted to each such persons, and whether
Awards granted to each such Participant under the Plan shall be Incentive and/or
Non-Incentive Stock Options. In selecting Participants and in determining the
number of Shares of Common Stock to be granted to each such Participant, the
Committee may consider the nature of the prior and anticipated future services
rendered by each such Participant, each such Participant's current and potential
contribution to the Company and such other factors as the Committee may, in its
sole discretion, deem relevant. Participants who have been granted an Award may,
if otherwise eligible, be granted additional Awards.
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(b) The aggregate Fair Market Value (determined as of the date the
Option is granted) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by each Employee during any calendar year
(under all Incentive Stock Option plans, as defined in Section 422 of the Code,
of the Company or any present or future Parent or Subsidiary of the Company)
shall not exceed $100,000. Notwithstanding the prior provisions of this Section
6, the Committee may grant Options in excess of the foregoing limitations,
provided said Options shall be clearly and specifically designated as not being
Incentive Stock Options.
(c) In no event shall Shares subject to Options granted to
non-employee Directors in the aggregate under this Plan exceed more than 30% of
the total number of Shares authorized for delivery under this Plan pursuant to
Section 3 herein or more than 5% to any individual non-employee Director. In no
event shall Shares subject to Options granted to any Employee exceed more than
25% of the total number of Shares authorized for delivery under the Plan.
7. Term of the Plan. The Plan shall continue in effect for a term of ten
(10) years from the Effective Date, unless sooner terminated pursuant to Section
18 hereof. No Option shall be granted under the Plan after ten (10) years from
the Effective Date.
8. Terms and Conditions of Incentive Stock Options. Incentive Stock Options
may be granted only to Participants who are Employees. Each Incentive Stock
Option granted pursuant to the Plan shall be evidenced by an instrument in such
form as the Committee shall from time to time approve. Each Incentive Stock
Option granted pursuant to the Plan shall comply with, and be subject to, the
following terms and conditions:
(a) Option Price.
(i) The price per Share at which each Incentive Stock Option
granted by the Committee under the Plan may be exercised shall not, as to any
particular Incentive Stock Option, be less than the Fair Market Value of the
Common Stock on the date that such Incentive Stock Option is granted.
(ii) In the case of an Employee who owns Common Stock
representing more than ten percent (10%) of the outstanding Common Stock at the
time the Incentive Stock Option is granted, the Incentive Stock Option exercise
price shall not be less than one hundred and ten percent (110%) of the Fair
Market Value of the Common Stock on the date that the Incentive Stock Option is
granted.
(b) Payment. Full payment for each Share of Common Stock purchased
upon the exercise of any Incentive Stock Option granted under the Plan shall be
made at the time of exercise of each such Incentive Stock Option and shall be
paid in cash (in United States Dollars), Common Stock or a combination of cash
and Common Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at the Fair Market Value at the date of exercise.
The Company shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No Shares of Common Stock shall be issued
until full payment has been received by the Company, and no Optionee shall have
any of the rights of a stockholder of the Company until Shares of Common Stock
are issued to the Optionee.
(c) Term of Incentive Stock Option. The term of exercisability of each
Incentive Stock Option granted pursuant to the Plan shall be not more than ten
(10) years from the date each such
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Incentive Stock Option is granted, provided that in the case of an Employee who
owns stock representing more than ten percent (10%) of the Common Stock
outstanding at the time the Incentive Stock Option is granted, the term of
exercisability of the Incentive Stock Option shall not exceed five (5) years.
(d) Exercise Generally. Except as otherwise provided in Section 10
hereof, no Incentive Stock Option may be exercised unless the Optionee shall
have been in the employ of the Company at all times during the period beginning
with the date of grant of any such Incentive Stock Option and ending on the date
three (3) months prior to the date of exercise of any such Incentive Stock
Option. The Committee may impose additional conditions upon the right of an
Optionee to exercise any Incentive Stock Option granted hereunder which are not
inconsistent with the terms of the Plan or the requirements for qualification as
an Incentive Stock Option. Except as otherwise provided by the terms of the Plan
or by action of the Committee at the time of the grant of the Options, the
Options will be first exercisable at the rate of 20% on the one year anniversary
of the date of grant and 20% annually thereafter during such periods of service
as an Employee, Director or Director Emeritus.
(e) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held an Incentive Stock Option for at least six months may
engage in the "cashless exercise" of the Option. Upon a cashless exercise, an
Optionee shall give the Company written notice of the exercise of the Option
together with an order to a registered broker-dealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
(f) Transferability. An Incentive Stock Option granted pursuant to the
Plan shall be exercised during an Optionee's lifetime only by the Optionee to
whom it was granted and shall not be assignable or transferable otherwise than
by will or by the laws of descent and distribution.
9. Terms and Conditions of Non-Incentive Stock Options. Each Non-Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each Non-Incentive
Stock Option granted pursuant to the Plan shall comply with and be subject to
the following terms and conditions.
(a) Options Granted to Directors. Subject to the limitations of
Section 6(c), Non- Incentive Stock Options to purchase 21,490 shares of Common
Stock will be granted to each Director who is not an Employee as of the
Effective Date, at an exercise price equal to the Fair Market Value of the
Common Stock on such date of grant. The Options will be first exercisable at the
rate of 20% on the one year anniversary of the Effective Date and 20% annually
thereafter during such periods of service as a Director or Director Emeritus.
Upon the death or Disability of the Director or Director Emeritus, such Option
shall be deemed immediately 100% exercisable. Such Options shall continue to be
exercisable for a period of ten years following the date of grant without regard
to the continued services of such Director as a Director or Director Emeritus.
In the event of the Optionee's death, such Options may be exercised by the
personal representative of his estate or person or persons to whom his rights
under such Option shall have passed by will or by the laws of descent and
distribution. Options may be granted to newly appointed or elected non-employee
Directors within the sole discretion of the Committee. The exercise price per
Share of such Options granted shall be equal to the Fair Market Value of the
Common Stock at the time such Options are granted. All Options awarded in
accordance with this
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Section 9(a) as of the Effective Date shall have Dividend Equivalent Rights
associated with such Options, as detailed at Section 12 herein. All outstanding
Awards shall become immediately exercisable in the event of a Change in Control
of the Savings Association or the Company, provided that such accelerated
vesting is not inconsistent with applicable regulations of the Office of Thrift
Supervision or other appropriate banking regulator at the time of such Change in
Control. Unless otherwise inapplicable, or inconsistent with the provisions of
this paragraph, the Options to be granted to Directors hereunder shall be
subject to all other provisions of this Plan.
(b) Option Price. The exercise price per Share of Common Stock for
each Non-Incentive Stock Option granted pursuant to the Plan shall be at such
price as the Committee may determine in its sole discretion, but in no event
less than the Fair Market Value of such Common Stock on the date of grant as
determined by the Committee in good faith.
(c) Payment. Full payment for each Share of Common Stock purchased
upon the exercise of any Non-Incentive Stock Option granted under the Plan shall
be made at the time of exercise of each such Non-Incentive Stock Option and
shall be paid in cash (in United States Dollars), Common Stock or a combination
of cash and Common Stock. Common Stock utilized in full or partial payment of
the exercise price shall be valued at its Fair Market Value at the date of
exercise. The Company shall accept full or partial payment in Common Stock only
to the extent permitted by applicable law. No Shares of Common Stock shall be
issued until full payment has been received by the Company and no Optionee shall
have any of the rights of a stockholder of the Company until the Shares of
Common Stock are issued to the Optionee.
(d) Term. The term of exercisability of each Non-Incentive Stock
Option granted pursuant to the Plan shall be not more than ten (10) years from
the date each such Non-Incentive Stock Option is granted.
(e) Exercise Generally. The Committee may impose additional conditions
upon the right of any Participant to exercise any Non-Incentive Stock Option
granted hereunder which is not inconsistent with the terms of the Plan. Except
as otherwise provided by the terms of the Plan or by action of the Committee at
the time of the grant of the Options, the Options will be first exercisable at
the rate of 20% on the one year anniversary of the date of grant and 20%
annually thereafter during such periods of service as an Employee, Director or
Director Emeritus.
(f) Cashless Exercise. Subject to vesting requirements, if applicable,
an Optionee who has held a Non-Incentive Stock Option for at least six months
may engage in the "cashless exercise" of the Option. Upon a cashless exercise,
an Optionee shall give the Company written notice of the exercise of the Option
together with an order to a registered broker-dealer or equivalent third party,
to sell part or all of the Optioned Stock and to deliver enough of the proceeds
to the Company to pay the Option exercise price and any applicable withholding
taxes. If the Optionee does not sell the Optioned Stock through a registered
broker-dealer or equivalent third party, the Optionee can give the Company
written notice of the exercise of the Option and the third party purchaser of
the Optioned Stock shall pay the Option exercise price plus any applicable
withholding taxes to the Company.
(g) Transferability. Any Non-Incentive Stock Option granted pursuant
to the Plan shall be exercised during an Optionee's lifetime only by the
Optionee to whom it was granted and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
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10. Effect of Termination of Employment, Disability or Death on Incentive
Stock Options.
(a) Termination of Employment. In the event that any Optionee's
employment with the Company shall terminate for any reason, other than
Disability or death, all of any such Optionee's Incentive Stock Options, and all
of any such Optionee's rights to purchase or receive Shares of Common Stock
pursuant thereto, shall automatically terminate on (A) the earlier of (i) or
(ii): (i) the respective expiration dates of any such Incentive Stock Options,
or (ii) the expiration of not more than three (3) months after the date of such
termination of employment; or (B) at such later date as is determined by the
Committee at the time of the grant of such Award based upon the Optionee's
continuing status as a Director or Director Emeritus of the Savings Association
or the Company, but only if, and to the extent that, the Optionee was entitled
to exercise any such Incentive Stock Options at the date of such termination of
employment, and further that such Award shall thereafter be deemed a
Non-Incentive Stock Option. In the event that a Subsidiary ceases to be a
Subsidiary of the Company, the employment of all of its employees who are not
immediately thereafter employees of the Company shall be deemed to terminate
upon the date such Subsidiary so ceases to be a Subsidiary of the Company.
(b) Disability. In the event that any Optionee's employment with the
Company shall terminate as the result of the Disability of such Optionee, such
Optionee may exercise any Incentive Stock Options granted to the Optionee
pursuant to the Plan at any time prior to the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the date which is
one (1) year after the date of such termination of employment, but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of such termination of employment.
(c) Death. In the event of the death of an Optionee, any Incentive
Stock Options granted to such Optionee may be exercised by the person or persons
to whom the Optionee's rights under any such Incentive Stock Options pass by
will or by the laws of descent and distribution (including the Optionee's estate
during the period of administration) at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is two (2) years after the date of death of such Optionee but only if, and
to the extent that, the Optionee was entitled to exercise any such Incentive
Stock Options at the date of death. For purposes of this Section 10(c), any
Incentive Stock Option held by an Optionee shall be considered exercisable at
the date of his death if the only unsatisfied condition precedent to the
exercisability of such Incentive Stock Option at the date of death is the
passage of a specified period of time. At the discretion of the Committee, upon
exercise of such Options the Optionee may receive Shares or cash or a
combination thereof. If cash shall be paid in lieu of Shares, such cash shall be
equal to the difference between the Fair Market Value of such Shares and the
exercise price of such Options on the exercise date.
(d) Incentive Stock Options Deemed Exercisable. For purposes of
Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any
Optionee shall be considered exercisable at the date of termination of
employment if any such Incentive Stock Option would have been exercisable at
such date of termination of employment without regard to the Disability or death
of the Participant.
(e) Termination of Incentive Stock Options. Except as may be specified
by the Committee at the time of grant of an Option, to the extent that any
Incentive Stock Option granted under the Plan to any Optionee whose employment
with the Company terminates shall not have been exercised within the applicable
period set forth in this Section 10, any such Incentive Stock Option, and all
rights
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to purchase or receive Shares of Common Stock pursuant thereto, as the case may
be, shall terminate on the last day of the applicable period.
11. Effect of Termination of Employment, Disability or Death on
Non-Incentive Stock Options. The terms and conditions of Non-Incentive Stock
Options relating to the effect of the termination of an Optionee's employment or
service, Disability of an Optionee or his death shall be such terms and
conditions as the Committee shall, in its sole discretion, determine at the time
of termination of service, unless specifically provided for by the terms of the
Agreement at the time of grant of the Award.
12. Dividend Equivalent Rights. The Committee, in its sole discretion, may
include as a term of any Option, the right of the Optionee to receive Dividend
Equivalent Rights. Such rights shall provide that upon the payment of a dividend
on the Common Stock, the holder of such Options shall receive payment of
compensation in an amount equivalent to the dividend payable as if such Options
had been exercised and such Common Stock held as of the dividend record date.
Such rights shall expire upon the expiration or exercise of such underlying
Options. Such rights are non-transferable and shall attach to Options whether or
not such Options are immediately exercisable. The dividend equivalent payments
associated with Options that are not yet immediately exercisable shall accrue
and shall be held in arrears. Such dividend equivalent payments held in arrears
shall be distributed to the Optionee upon the vesting of the related Option. All
Options granted by the Committee to Employees as of the Effective Date shall
have Dividend Equivalent Rights associated with such Options. All Options
granted to non-employee Directors of the Company or the Savings Association as
of the Effective Date in accordance Section 9(a) of the Plan shall have Dividend
Equivalent Rights associated with such Options.
13. Recapitalization, Merger, Consolidation, Change in Control and Other
Transactions.
(a) Adjustment. Subject to any required action by the stockholders of
the Company, within the sole discretion of the Committee, the aggregate number
of Shares of Common Stock for which Options may be granted hereunder, the number
of Shares of Common Stock covered by each outstanding Option, and the exercise
price per Share of Common Stock of each such Option, shall all be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt or payment of consideration by the Company (other
than Shares held by dissenting stockholders).
(b) Change in Control. All outstanding Awards shall become immediately
exercisable in the event of a Change in Control of the Company, as determined by
the Committee, provided that such accelerated vesting is not inconsistent with
applicable regulations of the Office of Thrift Supervision or other appropriate
banking regulator at the time of such Change in Control. In the
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event of such a Change in Control, the Committee and the Board of Directors will
take one or more of the following actions to be effective as of the date of such
Change in Control:
(i) provide that such Options shall be assumed, or equivalent
options shall be substituted, ("Substitute Options") by the acquiring or
succeeding corporation (or an affiliate thereof), provided that: (A) any such
Substitute Options exchanged for Incentive Stock Options shall meet the
requirements of Section 424(a) of the Code, and (B) the shares of stock issuable
upon the exercise of such Substitute Options shall constitute securities
registered in accordance with the Securities Act of 1933, as amended, ("1933
Act") or such securities shall be exempt from such registration in accordance
with Sections 3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, "Registered
Securities"), or in the alternative, if the securities issuable upon the
exercise of such Substitute Options shall not constitute Registered Securities,
then the Optionee will receive upon consummation of the Change in Control
transaction a cash payment for each Option surrendered equal to the difference
between (1) the Fair Market Value of the consideration to be received for each
share of Common Stock in the Change in Control transaction times the number of
shares of Common Stock subject to such surrendered Options, and (2) the
aggregate exercise price of all such surrendered Options, or
(ii) in the event of a transaction under the terms of which the
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment (the "Merger Price") for each share of Common Stock
exchanged in the Change in Control transaction, to make or to provide for a cash
payment to the Optionees equal to the difference between (A) the Merger Price
times the number of shares of Common Stock subject to such Options held by each
Optionee (to the extent then exercisable at prices not in excess of the Merger
Price) and (B) the aggregate exercise price of all such surrendered Options in
exchange for such surrendered Options.
(c) Extraordinary Corporate Action. Notwithstanding any provisions of
the Plan to the contrary, subject to any required action by the stockholders of
the Company, in the event of any Change in Control, recapitalization, merger,
consolidation, exchange of Shares, spin-off, reorganization, tender offer,
partial or complete liquidation or other extraordinary corporate action or
event, the Committee, in its sole discretion, shall have the power, prior or
subsequent to such action or event to:
(i) appropriately adjust the number of Shares of Common Stock
subject to each Option, the Option exercise price per Share of Common Stock, and
the consideration to be given or received by the Company upon the exercise of
any outstanding Option;
(ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or
(iii) make such other adjustments in connection with the Plan as
the Committee, in its sole discretion, deems necessary, desirable, appropriate
or advisable; provided, however, that no action shall be taken by the Committee
which would cause Incentive Stock Options granted pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code without the consent of the
Optionee.
Except as expressly provided in Sections 13(a), 13(b) and 13(e)
hereof, no Optionee shall have any rights by reason of the occurrence of any of
the events described in this Section 13.
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(d) Acceleration. The Committee shall at all times have the power to
accelerate the exercise date of Options previously granted under the Plan;
provided that such action is not contrary to regulations of the OTS or other
appropriate banking regulator then in effect.
(e) Non-recurring Dividends. Upon the payment of a special or
non-recurring cash dividend that has the effect of a return of capital to the
stockholders, the Option exercise price per share shall be adjusted
proportionately, except to the extent that the Participant shall otherwise
receive payments associated with Dividend Equivalent Rights attributable to such
Options with regard to such special or non-recurring cash dividends.
14. Time of Granting Options. The date of grant of an Option under the Plan
shall, for all purposes, be the date on which the Committee makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each individual to whom an Option is so granted within a reasonable
time after the date of such grant in a form determined by the Committee.
15. Effective Date. The Plan shall become effective upon the date of
approval of the Plan by the stockholders of the Company, subject to approval or
non-objection by the Office of Thrift Supervision, if applicable. The Committee
may make a determination related to Awards prior to the Effective Date with such
Awards to be effective upon the date of stockholder approval of the Plan.
16. Approval by Stockholders. The Plan shall be approved by stockholders of
the Company within twelve (12) months before or after the date the Plan is
approved by the Board.
17. Modification of Options. At any time and from time to time, the Board
may authorize the Committee to direct the execution of an instrument providing
for the modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any right or
benefit which could not be conferred on the Optionee by the grant of a new
Option at such time, or shall not materially decrease the Optionee's benefits
under the Option without the consent of the holder of the Option, except as
otherwise permitted under Section 18 hereof.
18. Amendment and Termination of the Plan.
(a) Action by the Board. The Board may alter, suspend or discontinue
the Plan, except that no action of the Board may increase (other than as
provided in Section 13 hereof) the maximum number of Shares permitted to be
optioned under the Plan, materially increase the benefits accruing to
Participants under the Plan or materially modify the requirements for
eligibility for participation in the Plan unless such action of the Board shall
be subject to approval or ratification by the stockholders of the Company.
(b) Change in Applicable Law. Notwithstanding any other provision
contained in the Plan, in the event of a change in any federal or state law,
rule or regulation which would make the exercise of all or part of any
previously granted Option unlawful or subject the Company to any penalty, the
Committee may restrict any such exercise without the consent of the Optionee or
other holder thereof in order to comply with any such law, rule or regulation or
to avoid any such penalty.
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19. Conditions Upon Issuance of Shares; Limitations on Option Exercise
Cancellation of Option Rights.
(a) Shares shall not be issued with respect to any Option granted
under the Plan unless the issuance and delivery of such Shares shall comply with
all relevant provisions of applicable law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities laws and the requirements of any
stock exchange upon which the Shares may then be listed.
(b) The inability of the Company to obtain any necessary
authorizations, approvals or letters of non-objection from any regulatory body
or authority deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares issuable hereunder shall relieve the Company of
any liability with respect to the non-issuance or sale of such Shares.
(c) As a condition to the exercise of an Option, the Company may
require the person exercising the Option to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
(d) Notwithstanding anything herein to the contrary, upon the
termination of employment or service of an Optionee by the Company or its
Subsidiaries for "cause" as defined at 12 C.F.R. 563.39(b)(1) as determined by
the Board of Directors, all Options held by such Participant shall cease to be
exercisable as of the date of such termination of employment or service.
(e) Upon the exercise of an Option by an Optionee (or the Optionee's
personal representative), the Committee, in its sole and absolute discretion,
may make a cash payment to the Optionee, in whole or in part, in lieu of the
delivery of shares of Common Stock. Such cash payment to be paid in lieu of
delivery of Common Stock shall be equal to the difference between the Fair
Market Value of the Common Stock on the date of the Option exercise and the
exercise price per share of the Option. Such cash payment shall be in exchange
for the cancellation of such Option. Such cash payment shall not be made in the
event that such transaction would result in liability to the Optionee or the
Company under Section 16(b) of the Securities Exchange Act of 1934, as amended,
and regulations promulgated thereunder.
20. Reservation of Shares. During the term of the Plan, the Company will
reserve and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
21. Unsecured Obligation. No Participant under the Plan shall have any
interest in any fund or special asset of the Company by reason of the Plan or
the grant of any Option under the Plan. No trust fund shall be created in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.
22. Withholding Tax. The Company shall have the right to deduct from all
amounts paid in cash with respect to the cashless exercise of Options and
Dividend Equivalent Rights under the Plan any taxes required by law to be
withheld with respect to such cash payments. Where a Participant or other person
is entitled to receive Shares pursuant to the exercise of an Option, the Company
shall have the right to require the Participant or such other person to pay the
Company the amount of any taxes which the Company is required to withhold with
respect to such Shares, or, in lieu thereof, to retain, or to sell without
notice, a number of such Shares sufficient to cover the amount required to be
withheld.
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23. No Employment Rights. No Director, Employee or other person shall have
a right to be selected as a Participant under the Plan. Neither the Plan nor any
action taken by the Committee in administration of the Plan shall be construed
as giving any person any rights of employment or retention as an Employee,
Director or in any other capacity with the Company, the Savings Association or
other Subsidiaries.
24. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of North Carolina, except to the extent
that federal law shall be deemed to apply.
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Exhibit B
Home Federal Savings and Loan Association
Restricted Stock Plan
and Trust Agreement
Article I
ESTABLISHMENT OF THE PLAN AND TRUST
1.01 Home Federal Savings and Loan Association ("Savings Association")
hereby establishes the Restricted Stock Plan (the "Plan") and Trust (the
"Trust") upon the terms and conditions hereinafter stated in this Restricted
Stock Plan and Trust Agreement (the "Agreement").
1.02 The Trustee hereby accepts this Trust and agrees to hold the Trust
assets existing on the date of this Agreement and all additions and accretions
thereto upon the terms and conditions hereinafter stated.
Article II
PURPOSE OF THE PLAN
2.01 The purpose of the Plan is to reward and to retain personnel of
experience and ability in key positions of responsibility with the Savings
Association and its subsidiaries, by providing such personnel of the Savings
Association and its subsidiaries with an equity interest in the parent
corporation of the Savings Association, Green Street Financial Corp ("Parent"),
as compensation for their prior and anticipated future professional
contributions and service to the Savings Association and its subsidiaries.
Article III
DEFINITIONS
The following words and phrases when used in this Plan with an initial
capital letter, unless the context clearly indicates otherwise, shall have the
meaning as set forth below. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun and the singular shall include the plural.
3.01 "Beneficiary" means the person or persons designated by the
Participant to receive any benefits payable under the Plan in the event of such
Participant's death. Such person or persons shall be designated in writing on
forms provided for this purpose by the Committee and may be changed from time to
time by similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Participant's surviving spouse, if
any, or if none, the Participant's estate.
3.02 "Board" means the Board of Directors of the Savings Association, or
any successor corporation thereto.
3.03 "Cause" means the personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profits, intentional
failure to perform stated duties, willful violation of a material provision of
any law, rule or regulation (other than traffic violations and similar offense),
or a material violation of a final cease-and-desist order or any other action
which results in a substantial financial loss to the Parent, Savings Association
or its Subsidiaries.
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3.04 "Change in Control" shall mean: (i) the sale of all, or a material
portion, of the assets of the Parent or Savings Association; (ii) the merger or
recapitalization of the Parent or the Savings Association whereby the Parent or
Savings Association is not the surviving entity; (iii) a change in control of
the Parent or Savings Association, as otherwise defined or determined by the
Office of Thrift Supervision ("OTS") or regulations promulgated by it; or (iv)
the acquisition, directly or indirectly, of the beneficial ownership (within the
meaning of that term as it is used in Section 13(d) of the 1934 Act and the
rules and regulations promulgated thereunder) of twenty-five percent (25%) or
more of the outstanding voting securities of the Parent or Savings Association
by any person, trust, entity or group. This limitation shall not apply to the
purchase of shares of up to 25% of any class of securities of the Parent or
Savings Association by a tax-qualified employee stock benefit plan which is
exempt from the approval requirements, set forth under 12 C.F.R.
ss.574.3(c)(1)(vi) as now in effect or as may hereafter be amended. The term
"person" refers to an individual or a corporation, partnership, trust,
association, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization or any other form of entity not specifically listed herein. The
decision of the Committee as to whether a Change in Control has occurred shall
be conclusive and binding.
3.05 "Committee" means the Board of Directors of the Parent or the
Restricted Stock Plan Committee appointed by the Board of Directors of the
Parent pursuant to Article IV hereof.
3.06 "Common Stock" means shares of the common stock of the Savings
Association or any successor corporation or Parent thereto.
3.07 "Conversion" means the effective date of the stock charter of the
Savings Association and simultaneous acquisition of all of the outstanding stock
of the Savings Association by the Parent.
3.08 "Director" means a member of the Board of the Savings Association.
3.09 "Director Emeritus" means a person serving as a director emeritus or
other similar position as may be appointed by the Board of Directors of the
Savings Association or the Parent from time to time.
3.10 "Disability" means any physical or mental impairment which renders the
Participant incapable of continuing in the employment or service of the Savings
Association or the Parent in his current capacity as determined by the
Committee.
3.11 "Employee" means any person who is employed by the Savings Association
or a Subsidiary.
3.12 "Effective Date" shall mean the date of stockholder approval of the
Plan by the Parent's stockholders.
3.13 "Parent" shall mean Green Street Financial Corp, the parent
corporation of the Savings Association.
3.14 "Participant" means an Employee or Director who receives a Plan Share
Award under the Plan.
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3.15 "Plan Shares" means shares of Common Stock held in the Trust which are
awarded or issuable to a Participant pursuant to the Plan.
3.16 "Plan Share Award" or "Award" means a right granted to a Participant
under this Plan to earn or to receive Plan Shares.
3.17 "Plan Share Reserve" means the shares of Common Stock held by the
Trust pursuant to Sections 5.03 and 5.04.
3.18 "Savings Association" means Home Federal Savings and Loan Association,
and any successor corporation thereto.
3.19 "Subsidiary" means those subsidiaries of the Savings Association
which, with the consent of the Board, agree to participate in this Plan.
3.20 "Trustee" or "Trustee Committee" means that person(s) or entity
nominated by the Committee and approved by the Board pursuant to Sections 4.01
and 4.02 to hold legal title to the Plan assets for the purposes set forth
herein.
Article IV
ADMINISTRATION OF THE PLAN
4.01 Role of the Committee. The Plan shall be administered and interpreted
by the Board of Directors of the Parent or a Committee appointed by said Board,
which shall consist of not less than two non-employee members of the Board,
which shall have all of the powers allocated to it in this and other sections of
the Plan. All persons designated as members of the Committee shall be
"Non-Employee Directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended ("1934 Act"). The interpretation and
construction by the Committee of any provisions of the Plan or of any Plan Share
Award granted hereunder shall be final and binding. The Committee shall act by
vote or written consent of a majority of its members. Subject to the express
provisions and limitations of the Plan, the Committee may adopt such rules,
regulations and procedures as it deems appropriate for the conduct of its
affairs. The Committee shall report its actions and decisions with respect to
the Plan to the Board at appropriate times, but in no event less than one time
per calendar year. The Committee shall recommend to the Board one or more
persons or entity to act as Trustee in accordance with the provision of this
Plan and Trust and the terms of Article VIII hereof.
4.02 Role of the Board. The members of the Committee and the Trustee shall
be appointed or approved by, and will serve at the pleasure of the Board. The
Board may in its discretion from time to time remove members from, or add
members to, the Committee, and may remove, replace or add Trustees. The Board
shall have all of the powers allocated to it in this and other sections of the
Plan, may take any action under or with respect to the Plan which the Committee
is authorized to take, and may reverse or override any action taken or decision
made by the Committee under or with respect to the Plan, provided, however, that
the Board may not revoke any Plan Share Award already made except as provided in
Section 7.01(b) herein.
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4.03 Limitation on Liability. No member of the Board, the Committee or the
Trustee shall be liable for any determination made in good faith with respect to
the Plan or any Plan Share Awards granted. If a member of the Board, Committee
or any Trustee is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by any reason of anything done or not done by
him in such capacity under or with respect to the Plan, the Parent and the
Savings Association shall indemnify such member against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in the best interests of the Parent, the Savings Association and
its Subsidiaries and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Article V
CONTRIBUTIONS; PLAN SHARE RESERVE
5.01 Amount and Timing of Contributions. The Board of Directors of the
Savings Association shall determine the amounts (or the method of computing the
amounts) to be contributed by the Savings Association to the Trust established
under this Plan. Such amounts shall be paid to the Trustee at the time of
contribution. No contributions to the Trust by Participants shall be permitted
except with respect to amounts necessary to meet tax withholding obligations.
5.02 Initial Investment. Any funds held by the Trust prior to investment in
the Common Stock shall be invested by the Trustee in such interest-bearing
account or accounts at the Savings Association as the Trustee shall determine to
be appropriate.
5.03 Investment of Trust Assets. Following approval of the Plan by
stockholders of the Parent and receipt of any other necessary regulatory
approvals, the Trust shall purchase Common Stock of the Parent in an amount
equal to up to 100% of the Trust's assets, after providing for any required
withholding as needed for tax purposes, provided, however, that the Trust shall
not purchase more than 171,925 shares of Common Stock, representing 4% of the
aggregate shares of Common Stock issued by the Parent in the Conversion. The
Trustee may purchase shares of Common Stock in the open market or, in the
alternative, may purchase authorized but unissued shares of the Common Stock
from the Parent sufficient to fund the Plan Share Reserve.
5.04 Effect of Allocations, Returns and Forfeitures Upon Plan Share
Reserves. Upon the allocation of Plan Share Awards under Sections 6.02 and 6.05,
or the decision of the Committee to return Plan Shares to the Parent, the Plan
Share Reserve shall be reduced by the number of Shares subject to the Awards so
allocated or returned. Any Shares subject to an Award which are not earned
because of forfeiture by the Participant pursuant to Section 7.01 shall be added
to the Plan Share Reserve.
Article VI
ELIGIBILITY; ALLOCATIONS
6.01 Eligibility. Employees are eligible to receive Plan Share Awards
within the sole discretion of the Committee. Directors who are not otherwise
Employees shall receive Plan Share Awards pursuant to Section 6.05.
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6.02 Allocations. The Committee will determine which of the Employees will
be granted Plan Share Awards and the number of Shares covered by each Award,
provided, however, that in no event shall any Awards be made which will violate
the Charter or Bylaws of the Savings Association or its Parent or Subsidiaries
or any applicable federal or state law or regulation. In the event Shares are
forfeited for any reason or additional Shares are purchased by the Trustee, the
Committee may, from time to time, determine which of the Employees will be
granted Plan Share Awards to be awarded from forfeited Shares. In selecting
those Employees to whom Plan Share Awards will be granted and the number of
shares covered by such Awards, the Committee shall consider the prior and
anticipated future position, duties and responsibilities of the Employees, the
value of their prior and anticipated future services to the Savings Association
and its Subsidiaries, and any other factors the Committee may deem relevant. All
actions by the Committee shall be deemed final, except to the extent that such
actions are revoked by the Board. Notwithstanding anything herein to the
contrary, in no event shall any Employee receive Plan Share Awards in excess of
25% of the aggregate Plan Shares authorized under the Plan.
6.03 Form of Allocation. As promptly as practicable after a determination
is made pursuant to Section 6.02 or Section 6.05 that a Plan Share Award is to
be made, the Committee shall notify the Participant in writing of the grant of
the Award, the number of Plan Shares covered by the Award, and the terms upon
which the Plan Shares subject to the award may be earned. The date on which the
Committee makes its award determination or the date the Committee so notifies
the Participant shall be considered the date of grant of the Plan Share Awards
as determined by the Committee. The Committee shall maintain records as to all
grants of Plan Share Awards under the Plan.
6.04 Allocations Not Required. Notwithstanding anything to the contrary at
Sections 6.01, 6.02 or 6.05, no Employee shall have any right or entitlement to
receive a Plan Share Award hereunder, such Awards being at the sole discretion
of the Committee and the Board, nor shall the Employees as a group have such a
right. The Committee may, with the approval of the Board (or, if so directed by
the Board) return all Common Stock in the Plan Share Reserve to the Savings
Association at any time, and cease issuing Plan Share Awards.
6.05 Awards to Directors. Notwithstanding anything herein to the contrary,
upon the Effective Date, a Plan Share Award consisting of 8,596 Plan Shares
shall be awarded to each Director of the Savings Association that is not
otherwise an Employee. Such Plan Share Award shall be earned and non-forfeitable
at the rate of one-fifth as of the one-year anniversary of the Effective Date
and an additional one-fifth following each of the next four successive years
during such periods of service as a Director or Director Emeritus. Further, such
Plan Share Award shall be immediately 100% earned and non-forfeitable in the
event of the death or Disability of such Director or Director Emeritus, or upon
a Change in Control of the Savings Association or Parent; provided that such
accelerated vesting is not inconsistent with applicable regulations of the
Office of Thrift Supervision ("OTS") or other appropriate banking regulator at
the time of such Change in Control. Subsequent to the Effective Date, Plan Share
Awards may be awarded to newly elected or appointed Directors of the Savings
Association by the Committee, provided that total Plan Share Awards granted to
non-employee Directors of the Savings Association shall not exceed 30% of the
total Plan Share Reserve in the aggregate under the Plan or 5% of the total Plan
Share Reserve to any individual non-employee Director.
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Article VII
EARNINGS AND DISTRIBUTION OF PLAN SHARES; VOTING RIGHTS
7.01 Earnings Plan Shares; Forfeitures.
(a) General Rules. Unless the Committee shall specifically state to the
contrary at the time a Plan Share Award is granted, Plan Shares subject to an
Award shall be earned and non-forfeitable by a Participant at the rate of
one-fifth of such Award following one year after the granting of such Award, and
an additional one-fifth following each of the next four successive years;
provided that such Participant remains an Employee, Director, or Director
Emeritus during such period. Notwithstanding anything herein to the contrary, in
no event shall a Plan Share Award granted hereunder be earned and non-
forfeitable by a Participant more rapidly than at the rate of one-fifth of such
Award as of the one year anniversary of the date of grant and an additional
one-fifth following each of the next four successive years.
(b) Revocation for Misconduct. Notwithstanding anything herein to the
contrary, the Board may, by resolution, immediately revoke, rescind and
terminate any Plan Share Award, or portion thereof, previously awarded under
this Plan, to the extent Plan Shares have not been delivered thereunder to the
Participant, whether or not yet earned, in the case of a Participant who is
discharged from the employ or service of the Parent, Savings Association or a
Subsidiary for Cause, or who is discovered after termination of employment or
service to have engaged in conduct that would have justified termination for
Cause. A determination of Cause shall be made by the Board within its sole
discretion.
(c) Exception for Terminations Due to Death or Disability. Notwithstanding
the general rule contained in Section 7.01(a) above, all Plan Shares subject to
a Plan Share Award held by a Participant whose employment or service with the
Parent, Savings Association or a Subsidiary terminates due to death or
Disability, shall be deemed earned and nonforfeitable as of the Participant's
last date of employment or service with the Parent, Savings Association or
Subsidiary and shall be distributed as soon as practicable thereafter.
(d) Exception for Termination after a Change in Control. Notwithstanding
the general rule contained in Section 7.01 above, all Plan Shares subject to a
Plan Share Award held by a Participant shall be deemed to be immediately 100%
earned and non-forfeitable in the event of a Change in Control of the Parent or
Savings Association and shall be distributed as soon as practicable thereafter;
provided that such accelerated vesting is not inconsistent with applicable
regulations of the OTS or other appropriate banking regulator at the time of
such Change in Control.
7.02 Accrual and Payment of Dividends. A holder of a Plan Share Award,
whether or not earned, shall also be entitled to receive an amount equal to any
cash dividends declared and paid with respect to shares of Common Stock
represented by such Plan Share Award between the date the relevant Plan Share
Award was granted to such Participant and the date the Plan Shares are
distributed. Such cash dividend amounts shall be held in arrears under the Trust
and distributed upon the earning of the applicable Plan Share Award. Such
payment shall also include an appropriate amount of earnings, if any, of the
Trust assets with respect to any cash dividends so distributed.
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7.03 Distribution of Plan Shares.
(a) Timing of Distributions: General Rule. Except as provided in
Subsections (d) and (e) below, Plan Shares shall be distributed to the
Participant or his Beneficiary, as the case may be, as soon as practicable after
they have been earned. No fractional shares shall be distributed.
Notwithstanding anything herein to the contrary, at the discretion of the
Committee, Plan Shares may be distributed prior to such Shares being 100%
earned, provided that such Plan Shares shall contain a restrictive legend
detailing the applicable limitations of such shares with respect to transfer and
forfeiture.
(b) Form of Distribution. All Plan Shares, together with any shares
representing stock dividends, shall be distributed in the form of Common Stock.
One share of Common Stock shall be given for each Plan Share earned. Payments
representing cash dividends (and earnings thereon) shall be made in cash.
Notwithstanding anything within the Plan to the contrary, upon a Change in
Control whereby substantially all of the Common Stock of the Company shall be
acquired for cash, all Plan Shares associated with Plan Share Awards, together
with any shares representing stock dividends associated with Plan Share Awards,
shall be, at the sole discretion of the Committee, distributed as of the
effective date of such Change in Control, or as soon as administratively
feasible thereafter, in the form of cash equal to the consideration received in
exchange for such Common Stock represented by such Plan Shares.
(c) Withholding. The Trustee may withhold from any payment or distribution
made under this Plan sufficient amounts of cash or shares of Common Stock
necessary to cover any applicable withholding and employment taxes, and if the
amount of such payment or distribution is not sufficient, the Trustee may
require the Participant or Beneficiary to pay to the Trustee the amount required
to be withheld in taxes as a condition of delivering the Plan Shares. The
Trustee shall pay over to the Parent, Savings Association or Subsidiary which
employs or employed such Participant any such amount withheld from or paid by
the Participant or Beneficiary.
(d) Timing: Exception for 10% Shareholders. Notwithstanding Subsection (a)
above, no Plan Shares may be distributed prior to the date which is five years
from the effective date of the Conversion to the extent the Participant or
Beneficiary, as the case may be, would after receipt of such Shares own in
excess of ten percent (10%) of the issued and outstanding shares of Common Stock
held by parties other than Parent, unless such action is approved in advance by
a majority vote of disinterested directors of the Board of the Parent. Any Plan
Shares remaining undistributed solely by reason of the operation of this
Subsection (d) shall be distributed to the Participant or his Beneficiary on the
date which is five years from the effective date of the Conversion.
(e) Regulatory Exceptions. No Plan Shares shall be distributed, however,
unless and until all of the requirements of all applicable law and regulation
shall have been fully complied with, including the receipt of approval of the
Plan by the stockholders of the Parent by such vote, if any, as may be required
by applicable law and regulations as determined by the Board.
7.04 Voting of Plan Shares. After a Plan Share Award has become earned and
non- forfeitable, the Participant shall be entitled to direct the Trustee as to
the voting of the Plan Shares which are associated with the Plan Share Award and
which have not yet been distributed pursuant to Section 7.03, subject to rules
and procedures adopted by the Committee for this purpose. All shares of Common
Stock held by the Trust as to which Participants are not entitled to direct, or
have not directed, the voting of such Shares, shall be voted by the Trustee as
directed by the Committee.
B-7
<PAGE>
Article VIII
TRUST
8.01 Trust. The Trustee shall receive, hold, administer, invest and make
distributions and disbursements from the Trust in accordance with the provisions
of the Plan and Trust and the applicable directions, rules, regulations,
procedures and policies established by the Committee pursuant to the Plan.
8.02 Management of Trust. It is the intention of this Plan and Trust that
the Trustee shall have complete authority and discretion with respect to the
management, control and investment of the Trust, and that the Trustee shall
invest all assets of the Trust, except those attributable to cash dividends paid
with respect to Plan Shares not held in the Plan Share Reserve, in Common Stock
to the fullest extent practicable, except to the extent that the Trustee
determines that the holding of monies in cash or cash equivalents is necessary
to meet the obligations of the Trust. In performing their duties, the Trustees
shall have the power to do all things and execute such instruments as may be
deemed necessary or proper, including the following powers:
(a) To invest up to one hundred percent (100%) of all Trust assets in the
Common Stock without regard to any law now or hereafter in force limiting
investments for Trustees or other fiduciaries. The investment authorized
herein may constitute the only investment of the Trust, and in making such
investment, the Trustee is authorized to purchase Common Stock from the
Parent or from any other source, and such Common Stock so purchased may be
outstanding or newly issued shares.
(b) To invest any Trust assets not otherwise invested in accordance with
(a) above in such deposit accounts, and certificates of deposit (including
those issued by the Savings Association), obligations of the United States
government or its agencies or such other investments as shall be considered
the equivalent of cash.
(c) To sell, exchange or otherwise dispose of any property at any time held
or acquired by the Trust.
(d) To cause stocks, bonds or other securities to be registered in the name
of a nominee, without the addition of words indicating that such security
is an asset of the Trust (but accurate records shall be maintained showing
that such security is an asset of the Trust).
(e) To hold cash without interest in such amounts as may be in the opinion
of the Trustee reasonable for the proper operation of the Plan and Trust.
(f) To employ brokers, agents, custodians, consultants and accountants.
(g) To hire counsel to render advice with respect to their rights, duties
and obligations hereunder, and such other legal services or representation
as they may deem desirable.
(h) To hold funds and securities representing the amounts to be distributed
to a Participant or his Beneficiary as a consequence of a dispute as to the
disposition thereof, whether in a segregated account or held in common with
other assets.
B-8
<PAGE>
Notwithstanding anything herein contained to the contrary, the Trustee
shall not be required to make any inventory, appraisal or settlement or report
to any court, or to secure any order of a court for the exercise of any power
herein contained, or to maintain bond.
8.03 Records and Accounts. The Trustee shall maintain accurate and detailed
records and accounts of all transactions of the Trust, which shall be available
at all reasonable times for inspection by any legally entitled person or entity
to the extent required by applicable law, or any other person determined by the
Committee.
8.04 Earnings. All earnings, gains and losses with respect to Trust assets
shall be allocated in accordance with a reasonable procedure adopted by the
Committee, to bookkeeping accounts for Participants or to the general account of
the Trust, depending on the nature and allocation of the assets generating such
earnings, gains and losses. In particular, any earnings on cash dividends
received with respect to shares of Common Stock shall be allocated to accounts
for Participants, except to the extent that such cash dividends are distributed
to Participants, if such shares are the subject of outstanding Plan Share
Awards, or, otherwise to the Plan Share Reserve.
8.05 Expenses. All costs and expenses incurred in the operation and
administration of this Plan, including those incurred by the Trustee, shall be
paid by the Savings Association.
8.06 Indemnification. Subject to the requirements and limitations of
applicable laws and regulations, the Parent and the Savings Association shall
indemnify, defend and hold the Trustee harmless against all claims, expenses and
liabilities arising out of or related to the exercise of the Trustee's powers
and the discharge of their duties hereunder, unless the same shall be due to
their gross negligence or willful misconduct.
Article IX
MISCELLANEOUS
9.01 Adjustments for Capital Changes. The aggregate number of Plan Shares
available for issuance pursuant to the Plan Share Awards and the number of
Shares to which any Plan Share Award relates shall be proportionately adjusted
for any increase or decrease in the total number of outstanding shares of Common
Stock issued subsequent to the effective date of the Plan resulting from any
split, subdivision or consolidation of the Common Stock or other capital
adjustment, change or exchange of the Common Stock, or other increase or
decrease in the number or kind of shares effected without receipt or payment of
consideration by the Parent.
9.02 Amendment and Termination of the Plan. The Board may, by resolution,
at any time, amend or terminate the Plan. The power to amend or terminate the
Plan shall include the power to direct the Trustee to return to the Parent all
or any part of the assets of the Trust, including shares of Common Stock held in
the Plan Share Reserve, as well as shares of Common Stock and other assets
subject to Plan Share Awards which have not yet been earned by the Participants
to whom they have been awarded. However, the termination of the Trust shall not
affect a Participant's right to earn Plan Share Awards and to the distribution
of Common Stock relating thereto, including earnings thereon, in accordance with
the terms of this Plan and the grant by the Committee or the Board.
Notwithstanding the foregoing, no action of the Board may increase (other than
as provided in Section 9.01 hereof) the maximum number of Plan Shares permitted
to be awarded under the Plan as specified at Section 5.03, materially increase
B-9
<PAGE>
the benefits accruing to Participants under the Plan or materially modify the
requirements for eligibility for participation in the Plan unless such action of
the Board shall be subject to ratification by the stockholders of the Parent.
9.03 Nontransferable. Plan Share Awards and rights to Plan Shares shall not
be transferable by a Participant, and during the lifetime of the Participant,
Plan Shares may only be earned by and paid to the Participant who was notified
in writing of the Award by the Committee pursuant to Section 6.03. No
Participant or Beneficiary shall have any right in or claim to any assets of the
Plan or Trust, nor shall the Parent, Savings Association, or any Subsidiary be
subject to any claim for benefits hereunder.
9.04 No Employment Rights. Neither the Plan nor any grant of a Plan Share
Award or Plan Shares hereunder nor any action taken by the Trustee, the
Committee or the Board in connection with the Plan shall create any right,
either express or implied, on the part of any Participant to continue in the
employ or service of the Parent, Savings Association, or a Subsidiary thereof.
9.05 Voting and Dividend Rights. No Participant shall have any voting or
dividend rights of a stockholder with respect to any Plan Shares covered by a
Plan Share Award, except as expressly provided in Sections 7.02 and 7.04 above,
prior to the time said Plan Shares are actually distributed to such Participant.
9.06 Governing Law. The Plan and Trust shall be governed by and construed
under the laws of the State of North Carolina, except to the extent that Federal
Law shall be deemed applicable.
9.07 Effective Date. The Plan shall be effective as of the date of approval
of the Plan by stockholders of the Parent, subject to the receipt of approval or
non-objection by the OTS or other applicable banking regulator, if applicable.
9.08 Term of Plan. This Plan shall remain in effect until the earlier of
(i) termination by the Board, (ii) the distribution of all assets of the Trust,
or (iii) 21 years from the Effective Date. Termination of the Plan shall not
effect any Plan Share Awards previously granted, and such Plan Share Awards
shall remain valid and in effect until they have been earned and paid, or by
their terms expire or are forfeited.
9.09 Tax Status of Trust. It is intended that the Trust established hereby
shall be treated as a grantor trust of the Savings Association under the
provisions of Section 671 et seq. of the Internal Revenue Code of 1986, as
amended, as the same may be amended from time to time.
B-10
<PAGE>
GREEN STREET FINANCIAL CORP
241 Green Street
Fayetteville, North Carolina
(910) 483-3681
SPECIAL MEETING OF STOCKHOLDERS
October 17, 1996
The undersigned hereby appoints the Board of Directors of Green Street
Financial Corp (the "Company"), or its designee, with full powers of
substitution, to act as attorneys and proxies for the undersigned, to vote all
shares of Common Stock of the Company which the undersigned is entitled to vote
at the Special Meeting of Stockholders (the "Meeting"), to be held at the
offices of the Company, 241 Green Street, Fayetteville, North Carolina on
October 17, 1996, at 5:15 p.m. and at any and all adjournments thereof, in the
following manner:
FOR AGAINST ABSTAIN
1. The approval of the
Green Street Financial Corp
1996 Stock Option Plan. |_| |_| |_|
2. The approval of the
Home Federal Savings and Loan Association
Restricted Stock Plan and Trust Agreement. |_| |_| |_|
In their discretion, such attorneys and proxies are authorized to vote upon such
other business as may properly come before the Meeting or any adjournments
thereof. If necessary, the Meeting will be adjourned to solicit additional
proxies with respect to approval of the Green Street Financial Corp 1996 Stock
Option Plan and the Home Federal Savings and Loan Association Restricted Stock
Plan.
The Board of Directors recommends a vote "FOR" all of the above listed
propositions.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
SIGNED PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED
IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elects to vote at the Meeting, or at
any adjournments thereof, and after notification to the Secretary of the Company
at the Meeting of the stockholder's decision to terminate this proxy, the power
of said attorneys and proxies shall be deemed terminated and of no further force
and effect. The undersigned may also revoke this proxy by filing a subsequently
dated proxy or by written notification to the Secretary of the Company of his or
her decision to terminate this proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Special Meeting of Stockholders and a
Proxy Statement dated September 6, 1996.
[_] Please check here if you
Dated: ____________________, 1996 plan to attend the Meeting.
_____________________________ ________________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
_____________________________ ________________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant |_|
Check the appropriate box:
|_| 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 pursuant to Rule 14a-11(c) or Rule 14a-12
Green Street Financial Corp
_______________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
|_| $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4)and 0-11.
(1) Title of each class of securities to which transaction applies:
______________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_______________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing
fee is calculated and state how it was determined.)
_______________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________________________
(5) Total fee paid:
____________________________________________________________________________
|_| Fee paid previously with preliminary materials.
_______________________________________________________________________________
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
_______________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_______________________________________________________________________________
(3) Filing Party:
_______________________________________________________________________________
(4) Date Filed:
_______________________________________________________________________________
