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As filed with the Securities and Exchange Commission on April 29, 1996
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
UNITED CAROLINA
BANCSHARES CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0954530
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
POST OFFICE BOX 682
127 WEST WEBSTER STREET
WHITEVILLE, NORTH CAROLINA 28472
(Address of principal executive offices, including Zip Code)
STOCK OPTION POLICY FOR NON-EMPLOYEE DIRECTORS
(Full title of the plan)
HOWARD V. HUDSON, JR., ESQ.
UNITED CAROLINA BANCSHARES CORPORATION
POST OFFICE BOX 632
127 WEST WEBSTER STREET
WHITEVILLE, NORTH CAROLINA 28472
(910) 642-5131
(Name, address and telephone number, including area code, of agent for service)
COPY TO:
WILLIAM R. LATHAN, JR., ESQ.
WARD AND SMITH, P.A.
1001 COLLEGE COURT
POST OFFICE BOX 867
NEW BERN, NORTH CAROLINA 28560
(919) 633-1000
CALCULATION OF REGISTRATION FEE
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<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED BE REGISTERED (1) PER SHARE (2) OFFERING PRICE (2) FEE (2)
<S> <C> <C> <C> <C>
Common Stock,
$4.00 par value 23,414 $11.105541 $260,025 $100
</TABLE>
(1) This Registration Statement registers securities offered pursuant to terms
which provide for an adjustment in the number of securities being offered
to prevent dilution resulting from stock splits, stock dividends or similar
transactions and will be deemed to cover the additional securities offered
or issued in connection with any such provision.
(2) Pursuant to Rule 457(h)(1), the registration fee has been calculated on the
basis of the weighted average price per share at which shares could be
purchased upon the exercise of options granted under the plan.
<PAGE>
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Registrant with the Securities and Exchange
Commission (the "Commission") under the Securities Exchange Act of 1934 (the
"Exchange Act") are incorporated herein by reference:
(i) Registrant's Annual Report on Form 10-K for the year ended
December 31, 1995;
(ii) Registrant's Current Reports on Form 8-K dated January 25, 1996
and April 16, 1996;
(iii) Description of Registrant's common stock contained in its
Registration Statement on Form 10, as amended by Registrant's subsequent reports
filed under the Exchange Act.
All documents subsequently filed with the Commission by Registrant pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing
of a post-effective amendment which indicates that all securities being offered
have been sold or which deregisters all securities then remaining unsold shall
be deemed to be incorporated herein by reference and to be a part hereof from
the dates of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Ward and Smith, P.A., New Bern, North Carolina has rendered an opinion as to
certain legal matters regarding the shares of Registrant's common stock to which
this Registration Statement relates. Certain members of that firm beneficially
own an aggregate of approximately 9,180 shares of Registrant's common stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The North Carolina Business Corporation Act (the "NCBCA") provides for
indemnification by a corporation of its officers, directors, employees and
agents, and any person who is or was serving at the corporation's request as a
director, officer, employee or agent of another entity or enterprise or as a
trustee or administrator under an employee benefit plan, against liability and
expenses, including reasonable attorney's fees, in any proceeding (including
without limitation a proceeding brought by or on behalf of the corporation
itself) arising out of their status as such or their activities in any of the
foregoing capacities.
PERMISSIBLE INDEMNIFICATION. Under the NCBCA, a corporation may, but is not
required to, indemnify or agree to indemnify any such person against liability
and expenses incurred in any such proceeding, provided such person conducted
himself or herself in good faith and (I) in the case of conduct in his or her
official corporate capacity,
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reasonably believed that his or her conduct was in the corporation's best
interests, and (ii) in all other cases, reasonably believed that his or her
conduct was at least not opposed to the corporation's best interests; and, in
the case of a criminal proceeding, where he or she had no reasonable cause to
believe his or her conduct was unlawful. However, a corporation may not
indemnify such person either in connection with a proceeding by or in the right
of the corporation in which such person was adjudged liable to the corporation,
or in connection with any other proceeding charging improper personal benefit to
such person (whether or not involving action in an official capacity) in which
such person was adjudged liable on the basis that personal benefit was
improperly received.
MANDATORY INDEMNIFICATION. Unless limited by the corporation's charter, the
NCBCA requires a corporation to indemnify a director or officer of the
corporation who is wholly successful, on the merits or otherwise, in the defense
of any proceeding to which such person was a party because he or she is or was a
director or officer of the corporation against reasonable expenses incurred in
connection with the proceeding.
ADVANCE FOR EXPENSES. Expenses incurred by a director, officer, employee or
agent of the corporation in defending a proceeding may be paid by the
corporation in advance of the final disposition of the proceeding as authorized
by the board of directors in the specific case, or as authorized by the charter
or bylaws or by any applicable resolution or contract, upon receipt of an
undertaking by or on behalf of such person to repay amounts advanced unless it
ultimately is determined that such person is entitled to be indemnified by the
corporation against such expenses.
COURT-ORDERED INDEMNIFICATION. Unless otherwise provided in the corporation's
charter, a director or officer of the corporation who is a party to a proceeding
may apply for indemnification to the court conducting the proceeding or to
another court of competent jurisdiction. On receipt of an application, the
court, after giving any notice the court deems necessary, may order
indemnification if it determines either (i) that the director or officer is
entitled to mandatory indemnification as described above, in which case the
court also will order the corporation to pay the reasonable expenses incurred to
obtain the court-ordered indemnification, or (ii) that the director or officer
is fairly and reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not such person met the requisite standard of conduct
or was adjudged liable to the corporation in connection with a proceeding by or
in the right of the corporation or on the basis that personal benefit was
improperly received in connection with any other proceeding so charging (but if
adjudged so liable, indemnification is limited to reasonable expenses incurred).
VOLUNTARY INDEMNIFICATION. In addition to and separate and apart from
"permissible" and "mandatory" indemnification described above, a corporation
may, by charter, bylaw, contract or resolution, "indemnify or agree to
indemnify any one or more of its officers, directors, employees and agents
against liability and expenses in any proceeding (including without limitation a
proceeding brought by or
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on behalf of the corporation itself) arising out of their status as such or
their activities in any of the foregoing capacities. However, the corporation
may not indemnify or agree to indemnify a person against liability or expenses
he may incur on account of activities which were at the time taken known or
believed by such person to be clearly in conflict with the best interests of the
corporation. Any provision in a corporation's charter or bylaws or in a contract
or resolution may include provisions for recovery from the corporation of
reasonable costs, expenses and attorneys' fees in connection with the
enforcement of rights to indemnification granted therein and may further include
provisions establishing reasonable procedures for determining and enforcing such
rights.
PARTIES ENTITLED TO INDEMNIFICATION. The NCBCA defines "director" to include
ex-directors and the estate or personal representative of a director. Unless its
charter provides otherwise, a corporation may indemnify and advance expenses to
an officer, employee or agent of the corporation to the same extent as to a
director and also may indemnify and advance expenses to an officer, employee or
agent who is not a director to the extent, consistent with public policy, as may
be provided in its charter or bylaws, by general or specific action of its board
of directors, or by contract.
INDEMNIFICATION BY REGISTRANT. Subject to such restrictions as are provided
by federal securities law, Registrant's Bylaws provide for indemnification of
its directors and officers to the fullest extent permitted by law and require
its Board of Directors to take all actions necessary and appropriate to
authorize such indemnification. In addition, Registrant currently maintains
directors' and officers' liability insurance.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The following exhibits are filed herewith or incorporated herein by reference
as part of this Registration Statement:
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<S> <C>
4 Specimen of Registrant's Common Stock certificate (incorporated by reference from
Registrant's 1988 Annual Report on Form 10-K).
5 Opinion of Ward and Smith, P.A. as to the legality of the securities being registered (filed herewith).
23(a) Consent of KPMG Peat Marwick LLP to incorporation by reference of
its report on Registrant's financial statements (filed herewith).
23(b) Consent of Ward and Smith, P.A. (contained in its opinion filed herewith as Exhibit 5).
99 Copy of the Stock Option Policy for Non-Employee Directors.
</TABLE>
4
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ITEM 9. UNDERTAKINGS
(a) RULE 415 OFFERING. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment
to this Registration Statement:
(i) to include any Prospectus required by
Section 10(a)(3) of the Securities Act
of 1933;
(ii) to reflect in the Prospectus any facts
or events arising after the effective
date of the Registration Statement (or
the most recent post-effective amendment
thereof) which, individually or in the
aggregate, represent a fundamental
change in the information set forth in
the Registration Statement;
(iii) to include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required
to be included in a post-effective amendment by
those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the
Registration Statement.
(2) That, for purposes of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is
5
<PAGE>
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) REQUEST FOR ACCELERATION OF EFFECTIVENESS OR FILING OF REGISTRATION
STATEMENT ON FORM S-8
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
6
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Whiteville, State of North Carolina, on April 23,
1996.
UNITED CAROLINA BANCSHARES CORPORATION
(Registrant)
BY:S/ Kenneth L. Miller
Kenneth L. Miller
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
S/ E. Rhone Sasser Chief Executive April 23, 1996
E. Rhone Sasser Officer (principal
executive officer)
and Director
S/ Ronald C. Monger Executive Vice April 23, 1996
Ronald C. Monger President and Chief
Financial Officer
(principal financial
officer)
S/ John F. Watson Controller (principal April 23, 1996
John F. Watson accounting officer)
S/ J. W. Adams Director April 23, 1996
J. W. Adams
S/ John V. Andrews Director April 23, 1996
John V. Andrews
S/ Russell M. Carter Director April 23, 1996
Russell M. Carter
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S/ W. E. Carter Director April 23, 1996
W. E. Carter
S/ Alfred E. Cleveland Director April 23, 1996
Alfred E. Cleveland
S/ James L. Cresimore Director April 23, 1996
James L. Cresimore
S/ Thomas P. Dillon Director April 23, 1996
Thomas P. Dillon
S/ C. Frank Griffin Director April 23, 1996
C. Frank Griffin
S/ James C. High Director April 23, 1996
James C. High
S/ Jack E. Shaw Director April 23, 1996
Jack E. Shaw
S/ Harold B. Wells Director April 23, 1996
Harold B. Wells
S/ Charles M. Winston Director April 23, 1996
Charles M. Winston
8
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EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBER
4 Specimen of Registrant's Common Stock
certificate (incorporated herein by
reference from Exhibit IV to Registrant's
1988 Annual Report on Form 10-K).
5 Opinion of Ward and Smith, P.A. as to
the legality of the securities being
registered (filed herewith).
23(a) Consent of KPMG Peat Marwick LLP to
incorporation by reference of its
report on Registrant's financial
statements (filed herewith).
23(b) Consent of Ward and Smith, P.A.
(included in its opinion filed
herewith as Exhibit 5).
99 Copy of the Stock Option Policy for
Non-Employee Directors.
<PAGE>
EXHIBIT 5
April 29, 1996
The Board of Directors
United Carolina Bancshares Corporation
Post Office Box 632
Whiteville, North Carolina 28472
RE: Our File 80-0785(S)
Gentlemen:
You have asked for our opinion regarding 23,414 shares of common stock, $4.00
par value (the "Shares"), of United Carolina Bancshares Corporation (the
"Corporation") that are proposed to be issued and sold to the holders and upon
the exercise of options (the "Options") previously granted by Triad Bank (the
"Bank") under its Stock Option Policy for Non-Employee Directors (the "Plan")
and which remained outstanding at the effective time of the merger of the Bank
into the Corporation's wholly-owned bank subsidiary, United Carolina Bank
("UCB"). The Agreement and Plan of Reorganization and Merger dated October 19,
1995 among the Bank, UCB and the Corporation (the "Agreement") provided that,
when the merger became effective, the Options would be converted (as described
therein) into options to purchase common stock of the Corporation and the
Corporation would assume the Bank's obligations thereunder.
We have examined the Agreement, the Plan and certified copies of resolutions
adopted by the Corporation's Board of Directors approving the Agreement,
ratifying and approving the assumption of the Options, and reserving and
authorizing the Shares for issuance upon exercise of the Options. Additionally,
we have examined such other records and documents and have had such discussions
with officers of the Corporation as we deemed necessary with respect to the
organization of the Corporation and other matters. Based upon such examination,
and provided that (i) the Options originally were properly issued by the Bank,
(ii) the Corporation's Registration Statement on Form S-8 filed with the
Securities and Exchange Commission relating to the Shares shall have become and
shall remain effective, and (iii) the Shares covered by the Registration
<PAGE>
The Board of Directors
United Carolina Bancshares Corporation
April 1, 1996
Page 2
Statement shall have been issued and sold upon the exercise and in accordance
with the terms of the Options and following receipt by the Corporation of the
purchase price of such Shares, then the Shares so issued and sold will be
validly authorized, legally issued, fully paid and nonassessable.
This opinion is furnished by us solely for your benefit and in connection with
the filing of the above Registration Statement. Without our prior express
written consent this opinion may not used for any other purpose and may not be
quoted or relied upon by, nor may copies be delivered to, any other person or
entity.
We hereby consent to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Yours truly,
S/ WARD AND SMITH, P.A.
WARD AND SMITH, P.A.
<PAGE>
EXHIBIT 23(a)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
United Carolina Bancshares Corporation
We consent to incorporation by reference in the Registration Statement on Form
S-8 of United Carolina Bancshares Corporation (the "Corporation") relating to
the Stock Option Policy for Non-Employee Directors of Triad Bank, as assumed by
United Carolina Bancshares Corporation, of our report dated January 17, 1996,
relating to the consolidated balance sheets of United Carolina Bancshares
Corporation and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the years in the three-year period ended December 31, 1995, which report
appears in the December 31, 1995 annual report on Form 10-K of United Carolina
Bancshares Corporation. Our report dated January 17, 1996, refers to the fact
that on December 31, 1993, the Corporation adopted the provisions of the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", and on January 1, 1993, the Corporation adopted the provisions of
the Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." Our report also refers to the
fact that on January 1, 1994, the Corporation adopted the provisions of the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits."
S/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Raleigh, North Carolina
April 29, 1996
<PAGE>
EXHIBIT 99
STOCK OPTION POLICY FOR NON-EMPLOYEE DIRECTORS
SECTION 1
DEFINITIONS
1.1 Agreement means a written agreement (including any amendment
or supplement thereto) between the Bank and a Participant
specifying the terms and conditions of an Option granted to
such Participant.
1.2 Associate Directors are those persons selected and
designated as such by the Board to be members of a local
Board in communities both inside and outside Greensboro in
which the Bank maintains one or more offices.
1.3 Bank means Triad Bank.
1.4 Board means the Board of Directors of the Bank.
1.5 Director means any non-employee member of the Bank's Board
of Directors.
1.6 Committee means the committee appointed by the Board to
administer the Policy pursuant to Section 3.
1.7 Common Stock means the common stock of the Bank ($2.50 par
value per share).
1.8 Fair Market Value means, on any given date, the average of
the closing quoted "bid" price and the closing quoted
"asked" price on the preceding business day as given by any
licensed market maker in the Common Stock, or, in the
discretion of the Board, the fair market value as determined
in good faith at the time of grant of such option by
decision of the Board.
1.9 Option means a stock option that entitles the holder to
purchase from the Bank a stated number of shares of Common
Stock at the price set forth in an Agreement.
1.10 Participant means a Director or Associate Director of the
Bank who satisfies the requirements of Section 4 and is
selected by the Committee to receive an Option.
1.11 Policy means the Triad Bank Stock Options Policy for
Non-Employee Directors as set forth herein.
SECTION 2
PURPOSES
This Policy is intended to assist the Bank in recruiting and retaining prominent
Directors and Associate Directors with ability and initiative and to reward such
Directors and Associate Directors
<PAGE>
who contribute significantly to the Bank's long-term growth and profitability by
allowing them to participate in its success and to associate their interests
with those of the Bank. It is further intended that Options granted under the
Policy shall constitute non-qualified stock options. The proceeds received by
the Bank from the sale of Common Stock pursuant to the Policy shall be used for
general corporate purposes.
SECTION 3
ADMINISTRATION
The Policy shall be administered by the Board through its Committee, which shall
consist of not fewer than three members of the Board to be selected by the Board
from time to time. The Committee shall have authority (subject to Board approval
and ratification) to grant Options upon such terms (not inconsistent with the
provisions of the Policy) as it may consider appropriate, in accordance with
Section 6. Such terms may include conditions (in addition to those contained in
the Policy) upon the exercisability of all or any part of an Option.
Notwithstanding any such conditions, the Committee may accelerate the time at
which any Option may be exercised. In addition, the Committee shall interpret
all provisions of the Policy; draft the form of Agreements; adopt, amend, and
rescind rules and regulations pertaining to the administration of the Policy;
and make other determinations necessary or advisable for the administration of
the Policy. However, the express grant in the Policy of any specific power to
the Committee shall not be construed as limiting the power or authority of the
Board which shall have authority and control over all Committee actions. No
member of the Committee shall be liable for any act done in good faith with
respect to the Policy, any Agreement or Option. All expenses of administering
the Policy shall be borne by the Bank.
SECTION 4
ELIGIBILITY
All Non-Employee Directors and Associate Directors of the Bank who, in the
judgment of the Committee, have contributed or can be expected to contribute to
the profits or growth of the Bank may be granted one or more Options.
SECTION 5
STOCK SUBJECT TO OPTIONS
Upon the exercise of any Option, the Bank may deliver to the Participant
authorized but unissued capital stock. The maximum aggregate number of shares of
Common Stock that may be issued pursuant to Options granted under the Policy is
60,000 subject to adjustment as provided in Section 11. If an Option expires or
is terminated, in whole or in part, for any reason other than its exercise, the
number of shares of Common Stock allocated to the
<PAGE>
Option or portion thereof may be reallocated to other Options to be granted
under the Policy.
SECTION 6
GRANTING OF OPTIONS
<PAGE>
6.01 Grants. On recommendation by the Committee, the Board may
grant Options and authorize the Bank to enter into Stock
Option Agreements with Directors and Associate Directors as
follows:
(a) Each current Non-Employee Director shall be
granted options to purchase up to 300 shares of
Common Stock for each completed full year of
past service as a Director through 1992;
provided, however, that the maximum number of
such shares to be granted under this
subparagraph (a) to any one Director shall not
exceed 3,000 and such grants shall be made upon
the effective date of this policy;
(b) Each current Associate Director shall be granted
options to purchase up to 100 shares of Common
Stock for each completed full year of past
service as an Associate Director through 1992;
provided, however, that the maximum number of
such shares to be granted under this
subparagraph (b) to any one Associate Director
shall not exceed 500 and such grants shall be
made upon the effective date of this policy;
(c) In addition, each Non-Employee Director shall be
granted options to purchase up to 300 shares of
Common Stock for each of the next five (5)
calendar years after 1992, in which the Bank
attains certain Board-adopted goals, including
deposit growth, profits for such calendar year,
operating ratios, and other criteria as
established by the Board and subject to the
Director attaining 75% attendance at all Board
and Committee Meetings during the year.
(d) In addition, each Associate Director shall be
granted options to purchase up to 100 shares of
Common Stock for each of the next five (5)
calendar years after 1992 in which the Bank
attains its Board-adopted goals including
deposit growth, profits for such calendar year,
operating ratios, and other criteria as
established by the Board and subject to the
Associate Director attaining 75% attendance at
all Board and Committee Meetings during the
year.
<PAGE>
6.02 Generally. The Committee may recommend the granting of
additional Options to Directors or Associate Directors of a
specified number of shares of the Bank's Common Stock, which
shall be subject to approval and ratification by the Bank's
Board of Directors. The granting of additional Options and
the specified number of such shares of Common Stock under
the Option shall be based on the attainment of certain
corporate goals, individual achievements and efforts, and
other criteria as determined by the Committee, including (i)
the Bank's growth in assets and profitability, (ii)
individual Directors' or Associate Directors' attendance at
regularly scheduled meetings, and (iii) other factors as the
Committee or Board may deem appropriate from time to time.
From time to time, the Committee shall evaluate the
attainment of the Bank's profitability and growth, and the
individual performance of each Director's and Associate
Director's achievements in enhancing the growth of the Bank.
The Committee shall then determine the number of additional
options to be granted (if any) to each eligible Director or
Associate Director and make such recommendations to the
Board for its approval.
SECTION 7
MAXIMUM NUMBER
The maximum aggregate number of shares (as adjusted pursuant to Section
11) shall not exceed 60,000 shares of Common Stock. Furthermore, the
maximum number of shares of Common Stock to be optioned under this
policy to any one Non-Employee Director may not exceed 5,000 shares, or
to any one Associate Director may not exceed 2,000 shares, subject to
adjustment provided in Section 11.
SECTION 8
OPTION PRICE
The price per share for Common Stock purchased by the exercise of any
Option granted under the Policy shall be the Fair Market Value per share
on the date the option was approved by the Board.
SECTION 9
EXERCISE OF OPTIONS
9.01 Non-transferability. Any Option granted under the Policy
shall be nontransferable except upon death by will or by the
laws of descent and distribution. During the lifetime of the
Participant to whom the Option is granted, the Option may be
exercised only by the
<PAGE>
Participant. No right or interest of a Participant in
any Option shall be liable for, or subject to, any lien,
obligation, or liability of such Participant.
9.02 Acceleration of Exercise of Options. In the event of a
merger, consolidation, or change in control of the Bank, the
Committee, with the approval of the Board, may accelerate
the granting of any unissued Options up to a maximum per
Director or Associate Director (as provided in Section 6)
within 30 days of such event.
9.03 Termination of a Directorship. (a) In the event of the
death, disability, retirement, or non-reelection of a
Director, any outstanding Options of that Director must be
exercised by such Participant or the personal representative
of his estate within 120 days of such event or they will
then lapse and become null and void, or (b) If a Director is
terminated for "Cause", including but not limited to
divulging trade secrets or customer lists, association with
a competitive financial institution, fraud, embezzlement, or
other reason which the Directors determine in the best
interest of the Bank, such termination shall render any
Options outstanding under this Policy immediately null,
void, and non-exercisable.
SECTION 10
METHOD OF EXERCISE
10.01 Exercise. Subject to the provisions of Sections 9, 10 and
15, an Option may be exercised in whole at any time or in
part from time to time at such times and in compliance with
such requirements as the Committee, with the approval of the
Board, shall determine. An Option granted under the Policy
may be exercised with respect to any number of whole shares
less than the full number for which the Option could be
exercised. Such partial exercise of an Option shall not
affect the Option as to the remaining shares subject to the
Option. The exercise of an Option shall result in the
termination of the Option to the extent of the number of
shares with respect to which the Option is exercised.
10.02 Payment. Unless otherwise provided by the Agreement, payment
of the option price shall be made in full at the time of
exercise.
10.03 Shareholder Rights. No Participant shall, as a result of
receiving any Option, have any rights as a shareholder until
the date he exercises such Option and pays for the stock in
full.
<PAGE>
SECTION 11
ADJUSTMENT UPON CHANGE IN COMMON STOCK
Should the Bank effect one or more stock dividends, stock splits, subdivisions
or consolidations of shares, recapitalization of shares, or other similar
changes in capitalization, the maximum number of shares as to which Options may
be granted under the Policy shall be proportionately adjusted and the Options
previously granted shall be adjusted as the Committee shall determine to be
equitably required. Any determination made under this Section 11 by the
Committee and approved and ratified by the Board shall be final and conclusive.
SECTION 12
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option shall be exercisable, no Common Stock shall be issued, no certificates
for shares of Common Stock shall be delivered, and no payment shall be made
under the Policy except in compliance with all applicable federal and state laws
and rules of all domestic stock exchanges or over-the-counter markets on which
the Bank's shares may be listed. The Bank shall have the right to rely on the
opinion of its counsel as to such compliance. Any share certificate issued to
evidence Common Stock for which an Option is exercised may bear such legends and
statements as the Committee may deem advisable or desirable. No Option shall be
exercisable, no Common Stock shall be issued, no certificate for shares shall be
delivered, and no payment shall be made under the Policy until the Bank has
obtained such consent or approval as the Committee and the Board may deem
advisable from regulatory bodies having jurisdiction over such matters.
SECTION 13
GENERAL PROVISIONS
13.01 Effect on Employment. Neither the adoption of the Policy,
its operation, nor any documents describing or referring to
the Policy (or any part thereof) shall confer on any
Director or Associate Director any right to continue in the
Directorship of the Bank or in any way affect any right and
power of the Board to terminate the Directorship of any
Director or Associate Director at any time with or without
assigning a reason therefor.
13.02 Unfunded Policy. The Policy, insofar as it provides for
grants, shall be unfunded, and the Bank shall not be
required to segregate any assets that may at any time be
represented by grants under the Policy. Any liability of the
Bank to any person with respect to any grant under the
Policy shall be based solely upon any contractual
obligations that may be created pursuant to the Agreement.
No such obligation of the Bank shall be
<PAGE>
deemed to be secured by any pledge of, or encumbrance on,
any property of the Bank.
13.03 Rules of Construction. Headings are given to the Sections of
the Policy solely as a convenience to facilitate reference.
The reference to any statute, regulation, or other provision
of law shall be construed to refer to any amendment to or
successor of such provision of law.
SECTION 14
AMENDMENT
The Board may amend or terminate the Policy from time to time; provided,
however, that no amendment may become effective until shareholder approval is
obtained if the amendment (i) increases the aggregate number of shares that may
be issued under Options or (ii) changes the class of Directors eligible to
become Participants. No amendment shall, without a Participant's consent,
adversely affect any rights of such Participant under any Option outstanding at
the time such amendment is made.
SECTION 15
DURATION OF POLICY
No Option may be granted after March 31, 1998, or exercised after December 31,
1998.
SECTION 16
EFFECTIVE DATE OF POLICY
Options may be granted under the Policy upon its adoption by the Board and
approval at a duly held shareholders' meeting by shareholders holding a majority
of the Bank's outstanding voting stock within twelve months of such adoption by
the Board. This Policy was approved by the Board of Directors on February 16,
1993, subject to the Policy being approved by the shareholders as provided
herein.
