<PAGE>
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:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Coddle Creek 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] No fee required.
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
CODDLE CREEK FINANCIAL CORP.
347 NORTH MAIN STREET
MOORESVILLE, NORTH CAROLINA 28115
(704) 664-4888
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 26, 1999.
NOTICE IS HEREBY GIVEN that a special meeting (the "Special Meeting") of
the stockholders of Coddle Creek Financial Corp. (the "Company") will be held on
January 26, 1999 at 11:00 a.m., Eastern Time, at the office of the Company at
347 North Main Street, Mooresville, North Carolina 28115.
The Special Meeting is for the purpose of considering and voting upon the
following matters:
1. To approve the Coddle Creek Financial Corp. Stock Option Plan;
2. To approve the Mooresville Savings Bank, Inc., SSB Management
Recognition Plan.
The Board of Directors has established December 16, 1998 as the record date
for the determination of stockholders entitled to notice of and to vote at the
Special Meeting and at any adjournments thereof. In the event there are not
sufficient shares present in person or by proxy to constitute a quorum at the
time of the Special Meeting, the Special Meeting may be adjourned in order to
permit further solicitation of proxies by the Company.
By Order of the Board of Directors
/s/BILLY R. WILLIAMS
Billy R. Williams
Secretary
Mooresville, North Carolina
December 29, 1998
A FORM OF PROXY IS ENCLOSED TO ENABLE YOU TO VOTE YOUR SHARES AT THE SPECIAL
MEETING. YOU ARE URGED, REGARDLESS OF THE NUMBER OF SHARES YOU HOLD, TO
COMPLETE, SIGN, DATE AND RETURN THE PROXY PROMPTLY. A RETURN ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, IS ENCLOSED FOR YOUR
CONVENIENCE.
<PAGE>
CODDLE CREEK FINANCIAL CORP.
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
JANUARY 26, 1999
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to stockholders of Coddle Creek
Financial Corp. (the "Company") in connection with the solicitation by the board
of directors of the Company (the "Board of Directors") of proxies to be used at
a special meeting of stockholders (the "Special Meeting") to be held on January
26, 1999 at 11:00 a.m., Eastern Time, at the office of the Company at 347 North
Main Street, Mooresville, North Carolina, and at any adjournments thereof. This
Proxy Statement and the accompanying form of proxy were first mailed to
stockholders on or about December 29, 1998.
REGARDLESS OF THE NUMBER OF SHARES OF THE COMPANY'S COMMON STOCK (THE
"COMMON STOCK") OWNED, IT IS IMPORTANT THAT STOCKHOLDERS BE PRESENT IN PERSON OR
REPRESENTED BY PROXY AT THE SPECIAL MEETING. STOCKHOLDERS ARE REQUESTED TO VOTE
BY COMPLETING, SIGNING, DATING AND RETURNING THE ENCLOSED PROXY IN THE PROVIDED
POSTAGE-PAID ENVELOPE. Any stockholder may vote for, against, or abstain with
respect to any matter to come before the Special Meeting. If the enclosed proxy
is properly completed, signed, dated, and returned, and not revoked, it will be
voted in accordance with the instructions therein. If the proxy is returned
with no instructions given, the proxy will be voted FOR approval of the Coddle
---
Creek Financial Corp. Stock Option Plan (the "Stock Option Plan") and the
Mooresville Savings Bank, Inc., SSB Management Recognition Plan (the "Management
Recognition Plan" or the "MRP"). If instructions are given with respect to one
but not both proposals, (i) such instructions as are given will be followed and
(ii) the proxy will be voted FOR the Stock Option Plan or the MRP if no
---
instructions on either such proposal are given.
Other than the matters listed on the attached Notice of Special Meeting of
Stockholders, the Board of Directors knows of no matters that will be presented
for consideration at the meeting. Execution of a proxy, however, confers on the
designated proxy holders discretionary authority to vote the shares represented
thereby in accordance with their best judgment on such other business, if any,
that may properly come before the Special Meeting or any adjournments thereof.
A proxy may be revoked at any time prior to its exercise by the filing of a
written notice of revocation with the Secretary of the Company, by delivering to
the Company a duly executed proxy bearing a later date, or by attending the
Special Meeting and voting in person. However, if you are a beneficial owner of
shares of the Company's outstanding Common Stock that are not registered in your
own name, you will need appropriate documentation from the holder of record of
your shares to vote personally at the Special Meeting.
The Company will pay the cost of preparing, assembling and mailing this
Proxy Statement and other proxy solicitation expenses, if any. In addition to
the use of the mail, proxies may be solicited personally or by telephone by
directors, officers and regular employees of the Company and its wholly-owned
savings bank subsidiary, Mooresville Savings Bank, Inc., SSB (the "Bank"),
without additional compensation
<PAGE>
therefor. The Company also will require brokerage houses and nominees to forward
these proxy materials to the beneficial owners of shares held of record by such
persons and, upon request, the Company will reimburse such persons for their
reasonable out-of-pocket expenses in doing so.
VOTING SECURITIES
The close of business on December 16, 1998 has been fixed by the Board of
Directors as the record date ("Record Date") for the determination of those
stockholders of record entitled to notice of and to vote at the Special Meeting
and any adjournments thereof. As of the Record Date, the Company had
outstanding 674,475 shares of Common Stock. Each share of Common Stock entitles
its owner to one vote on each matter calling for a vote of stockholders at the
Special Meeting.
The presence, in person or by proxy, of the holders of at least a majority
of shares of Common Stock entitled to vote at the Special Meeting is necessary
to constitute a quorum at the Special Meeting. Since many of our stockholders
cannot attend the Special Meeting, it is necessary that a large number be
represented by proxy. Accordingly, the Board of Directors has designated
proxies to represent those stockholders who cannot be present in person and who
desire to be so represented. In the event there are not sufficient stockholders
present, in person or by proxy, to constitute a quorum or to approve or ratify
any proposal at the time of the Special Meeting, the Special Meeting may be
adjourned in order to permit the further solicitation of proxies.
The Stock Option Plan and the MRP will be approved if the votes cast in
favor of the Stock Option Plan and the MRP exceed the votes cast opposing such
plans.
Abstentions will be counted for purposes of determining whether a quorum is
present at the Special Meeting. Abstentions will not be counted in tabulating
the votes cast on either proposal submitted to the stockholders. Broker non-
votes will not be counted either for determining the existence of a quorum or
for tabulating votes cast on either proposal.
2
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The Securities Exchange Act of 1934, as amended (the "Exchange Act"),
requires that any person who acquires the beneficial ownership of more than 5%
of the Common Stock of the Company notify the Securities and Exchange Commission
(the "SEC") and the Company. The table below contains certain information, as
of the Record Date, regarding all persons or "groups", as defined in the
Exchange Act, who held of record or who are known to the Company to own
beneficially more than 5% of the Company's Common Stock.
AMOUNT AND
NATURE OF PERCENTAGE
NAME AND ADDRESS BENEFICIAL OF
OF BENEFICIAL OWNER OWNERSHIP/1/ CLASS/2/
- ------------------- ------------ ----------
Claude U. Voils, Jr. 59,958/3/ 8.89%
221 South Academy Street
Mooresville, NC 28115
Jack G. Lawler 59,958/4/ 8.89%
1312 7th Avenue, N.E.
Jacksonville, AL 36265
Willis L. Barnette 59,958/5/ 8.89%
182 Lakeshore Drive
Mooresville, NC 28115
Donald R. Belk 61,511/6/ 9.12%
630 Belk Road
Mt. Ulla, NC 28125
___________________________________
/1/Unless otherwise noted, all shares are owned directly or indirectly by the
named individuals, by their spouses and minor children, or by other entities
controlled by the named individuals.
/2/Based upon a total of 674,475 shares of Common Stock outstanding at the
Record Date.
/3/Mr. Voils serves as a trustee of the Mooresville Savings Bank, Inc., SSB
Employee Stock Ownership Plan (the "ESOP") which holds 53,958 shares of the
Company's Common Stock. The trustees of the ESOP share certain voting and
investment power of such shares.
/4/Mr. Lawler serves as a trustee of the ESOP which holds 53,958 shares of the
Company's Common Stock. The trustees of the ESOP share certain voting and
investment power of such shares.
/5/Mr. Barnette serves as a trustee of the ESOP which holds 53,958 shares of the
Company's Common Stock. The trustees of the ESOP share certain voting and
investment power of such shares.
/6/Mr. Belk serves as a trustee of the ESOP which holds 53,958 shares of the
Company's Common Stock. The trustees of the ESOP share certain voting and
investment power of such shares. This number also includes 6,000 shares owned
jointly by Mr. Belk and his wife, and 1,553 shares owned by Mr. Belk's wife.
Mr. Belk disclaims beneficial ownership of the shares owned by his wife.
3
<PAGE>
Set forth below is certain information, as of the Record Date, regarding
those shares of Common Stock owned beneficially by each of the members of the
Board of Directors, each of the members of the board of directors of the Bank,
certain executive officers of the Company and the Bank, and the directors and
executive officers of the Company and the Bank as a group (all persons listed
are directors of the Company and the Bank).
AMOUNT AND
NATURE OF PERCENTAGE
BENEFICIAL OF
NAME AND ADDRESS OWNERSHIP/1, 2/ CLASS/3/
- ---------------- --------------- ----------
George W. Brawley, Jr.,President, 12,690 1.88%
Chief Executive Officer and
Chairman of the Board of Directors
of the Bank and the Company
143 Bufflehead
Mooresville, NC 28115
Dale W. Brawley, Executive Vice 7,450/4/ 1.10%
President and Treasurer of the Bank
and the Company, Director of the
Company
523 Houston Road
Troutman, NC 28166
Claude U. Voils, Jr., Director of the 59,958/5/ 8.89%
Bank and the Company
221 South Academy Street
Mooresville, NC 28115
Jack G. Lawler, Director of the Bank 59,958/6/ 8.89%
and the Company
1312 7th Avenue, N.E.
Jacksonville, AL 36265
Willis L. Barnette, Director of the 59,958/7/ 8.89%
Bank and the Company
182 Lakeshore Drive
Mooresville, NC 28115
4
<PAGE>
AMOUNT AND
NATURE OF PERCENTAGE
NAME AND ADDRESS BENEFICIAL OF
- ---------------- OWNERSHIP/1, 2/ CLASS/3/
--------------- ----------
Donald R. Belk, Director of the Bank 61,511/8/ 9.12%
and the Company
630 Belk Road
Mt. Ulla, NC 28125
Billy R. Williams, Secretary and 2,100/9/ .31%
Controller of the Bank and the
Company
143 Clark Branch Lane
Mooresville, NC 28115
Directors and Executive Officers as a 101,751/10/ 15.09%
Group (7 Persons)
________________________________
/1/Voting and investment power is not shared unless otherwise indicated.
/2/Unless otherwise noted, all shares are owned directly or indirectly by the
named individuals, their spouses and/or minor children, or other entities
controlled by the named individuals.
/3/Based upon a total of 674,475 shares of Common Stock outstanding at the
Record Date.
/4/Includes 1,892 shares of Common Stock held in the Bank's 401(k) plan for the
benefit of Mr. D. Brawley.
/5/Mr. Voils serves as a trustee of the ESOP which holds 53,958 shares of the
Company's Common Stock. The trustees of the ESOP share certain voting and
investment power of such shares.
/6/Mr. Lawler serves as a trustee of the ESOP which holds 53,958 shares of the
Company's Common Stock. The trustees of the ESOP share certain voting and
investment power of such shares.
/7/Mr. Barnette serves as a trustee of the ESOP which holds 53,958 shares of the
Company's Common Stock. The trustees of the ESOP share certain voting and
investment power of such shares.
/8/Mr. Belk serves as a trustee of the ESOP which holds 53,958 shares of the
Company's Common Stock. The trustees of the ESOP share certain voting and
investment power of such shares. This number also includes 6,000 shares owned
jointly by Mr. Belk and his wife, and 1,553 shares owned by Mr. Belk's wife.
Mr. Belk disclaims beneficial ownership of the shares owned by his wife.
/9/Includes 1,177 shares of Common Stock held in the Bank's 401(k) plan for the
benefit of Mr. Williams.
/10/The 53,958 shares held by the ESOP for which the trustees, Messrs. Voils,
Lawler, Barnette and Belk, share voting and investment power have been included
only once in the total number of shares owned beneficially by the directors and
executive officers as a group.
5
<PAGE>
BOARD OF DIRECTORS OF THE COMPANY AND THE BANK
The Company has a six-member board of directors composed of George W.
Brawley, Jr., Dale W. Brawley, Claude U. Voils, Jr., Jack G. Lawler, Willis L.
Barnette and Donald R. Belk. The Bank has a five-member board of directors
which is composed of the same persons who are currently directors of the Company
with the exception of Dale W. Brawley.
DIRECTOR COMPENSATION
DIRECTORS' FEES. Members of the Board of Directors receive no fees or
compensation for their service. However, all members of the Board of Directors,
other than Dale Brawley, are also directors of the Bank and are compensated for
that service. For their service on the Bank's board of directors, all members
of the Bank's board receive $1,200 per month. No additional fees were paid for
service on Board Committees.
Messrs. Belk, G. Brawley, Lawler, and Voils have entered one or more
unfunded deferred compensation agreements under seven substantially similar, but
separate plans with the Bank under which the participating directors have waived
payment of their Board of Directors fees and specified amounts for a period of
five or six years, depending upon the plan. Upon attaining 55, 65 or 70 years
of age, depending upon the plan, the directors will begin receiving a specified
payment in equal monthly installments over a period of 120 months. Such payment
shall be made to the designated beneficiary of the director should the director
die prior to attaining the age specified in the agreements. The agreements also
provide for payments of benefits in the event the director otherwise terminates
his directorship, subject to a five year vesting schedule. Some agreements
provide for the forfeiture of benefits in some circumstances. The Bank has
purchased life insurance policies on the lives of the directors to assist the
Bank in meeting its obligations under the agreements. Messrs. Belk and Voils
have begun receiving monthly payments under some of their deferred compensation
agreements. The total expense related to the directors' deferred compensation
arrangements, including the costs associated with Mr. G. Brawley's agreements
which totalled $70,103, was $189,761 in the fiscal year ended December 31, 1997.
In addition, in 1993, the Bank's Board of Directors approved the entering
of Retirement Plan Agreements with Messrs. Belk, G. Brawley and Voils. The
agreements provide for a monthly payment of $1,000 upon retirement following a
director's attainment of age 65 (but no sooner than five years from the date of
the Retirement Plan Agreement), death or disability. The agreements also
provide for payment of benefits in the event the director otherwise terminates
his directorship subject to a vesting schedule. Payments under the agreements
are to be made in equal monthly installments over a period of 120 months. The
Bank has purchased life insurance policies to assist the Bank in meeting its
obligations under the agreements. The total expense related to the Directors'
Retirement Plan Agreements was $112,520 in the fiscal year ended December 31,
1997.
MANAGEMENT COMPENSATION
The executive officers of the Company are not paid any cash compensation by
the Company. However, the executive officers of the Company also are executive
officers of the Bank and receive cash compensation from the Bank.
The following table sets forth for the fiscal years ended December 31, 1997
and 1996 certain information as to the cash compensation received by and the
amounts
6
<PAGE>
accrued for the benefit of George W. Brawley, the President and Chief Executive
Officer of the Bank. The table also sets forth for the fiscal year ended
December 31, 1997, certain information as to the cash compensation received by
and the amounts accrued for the benefit of Dale W. Brawley, the Executive Vice
President and Treasurer of the Bank. No other executive officer of the Bank had
cash compensation during the years ended December 31, 1997 that exceeded
$100,000 for services rendered in all capacities to the Bank.
<TABLE>
<CAPTION>
YEAR
NAME AND ENDING OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION DECEMBER 31, SALARY BONUS COMPENSATION($)/1/ COMPENSATION
- --------------------------- ------------ ----------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
George W. Brawley, Jr. 1997 $154,700/2/ $ 20,560/3/ ----------- $306,694/4/
President, Chief
Executive Officer and
Director
1996 143,050/5/ 9,600 ----------- 271,206/6/
Dale W. Brawley, 1997 91,100/7/ 14,336/8 / ----------- 56,721/9/
Executive Vice
President, Treasurer and
Director
</TABLE>
________________________________________________
/1/Under the "Other Annual Compensation" category, perquisites for the fiscal
years ended December 31, 1997 and 1996, and did not exceed the lesser of $50,000
or 10% of salary and bonus as reported for Mr. G. Brawley or Mr. D. Brawley.
/2/Includes (a) $14,400 in directors fees (of which $3,600 was deferred) and (b)
$8,300 in real estate appraisal fees paid to Mr. G. Brawley in the fiscal year
ended December 31, 1997.
/3/Includes $10,000 bonus awarded in connection with the Conversion.
/4/Includes (a) $137,887 accrued under various deferred compensation, salary
continuation, Directors' retirement and supplemental income agreements
established for the benefit of Mr. G. Brawley; (b) $11,808 contributed to the
Bank's 401(k) and the Non-Qualified Excess Benefit Plan for the benefit of Mr.
G. Brawley; and (c) $156,999 contributed to the Bank's Defined Benefit Pension
Plan for the benefit of Mr. G. Brawley. The Defined Benefit Plan was terminated
effective October 20, 1997.
/5/Includes (a) $ 14,400 in directors fees (of which $3,600 was deferred) and
(b) $8,650 in real estate appraisal fees paid to Mr. G. Brawley in the fiscal
year ended December 31, 1996.
/6/Includes (a) $131,138 accrued under various deferred compensation, salary
continuation, Directors' retirement and supplemental income agreements
established for the benefit of Mr. G. Brawley; (b) $11,640 contributed to the
Bank's 401(k) and the Non-Qualified Excess Benefit Plan for the benefit of Mr.
G. Brawley; and (c) $128,428 contributed to the Bank's Defined Benefit Pension
Plan for the benefit of Mr. G. Brawley. The Defined Benefit Plan was terminated
effective October 20, 1997.
/7/Includes (a) $3,600 deferred into certain deferred compensation arrangements
and (b) $8,300 in real estate appraisal fees paid to Mr. D. Brawley in the
fiscal year ended December 31, 1996.
/8/Includes $8,000 bonus paid in connection with the Conversion.
/9/Includes (a) $37,887 accrued under various deferred compensation, salary
continuation, and supplemental income agreements established for the benefit of
Mr. D. Brawley; (b) $7,148 contributed to the Bank's 401(k) and the Non-
Qualified Excess Benefit Plan for the benefit of Mr. D. Brawley; and (c) $11,686
contributed to the Bank's Defined Benefit Pension Plan for the benefit of Mr. D.
Brawley. The Defined Benefit Plan was terminated effective October 20, 1997.
BONUS COMPENSATION. The executive officers of the Bank received a
one-time bonus at the end of fiscal year 1997 which was awarded in connection
with their efforts during the Bank's conversion from a mutual North Carolina
savings bank to a stock North Carolina savings bank (the "Conversion"). The
amount of the Conversion bonuses paid to Messrs. George Brawley, Dale Brawley
and Billy Williams were $10,000, $8,000 and $7,000, respectively. In addition,
employees receive annual discretionary holiday bonuses, which during fiscal year
1997
7
<PAGE>
totaled $54,000, in the aggregate for all employees. The Bank anticipates
that discretionary bonuses will continue to be paid to its employees in the
future. However, as is the case with the Bank's compensation arrangements in
general, the Bank's bonus compensation is subject to regulatory oversight, and
therefore, could be changed in the future in response to regulatory requirements
or otherwise.
DEFERRED COMPENSATION, SUPPLEMENTAL INCOME AND SALARY CONTINUATION
AGREEMENTS. The Bank has entered into three separate but substantially similar
deferred compensation agreements with Dale W. Brawley, Executive Vice President
and Treasurer. The terms of these agreements are generally described in
"Directors Compensation," as are the terms of George W. Brawley, Jr.'s six
deferred compensation agreements. During the fiscal year ended December 31,
1997, the total expense related to the agreements for Mr. G. Brawley and Mr. D.
Brawley was $106,332.
The Bank has also entered into separate salary continuation agreements
with Mr. G. Brawley, Mr. D. Brawley and eight other non-executive employees of
the Bank. These agreements provide that the employee will receive a monthly
payment of $834 for five years upon reaching 65 years of age, for a total
payment of $50,000. In the event of the employee's death before all payments
have been made, benefits would be payable to designated beneficiaries. In
addition, if the employee should die prior to reaching 65 years of age, certain
monthly payments would be made for a five-year period to designated
beneficiaries. In the event the employee terminates his employment, for reasons
other than death, prior to reaching 65 years of age, the monthly benefit payment
would be reduced. The Bank has purchased life insurance on the lives of the
participants to reimburse the Bank at the death of the participant for a part of
the Bank's cost associated with the agreements. The annual life insurance
premium associated with the agreements for Mr. G. Brawley and Mr. D. Brawley is
$3,951 and $314, respectively. During the fiscal year ended December 31, 1997,
the Bank accrued $3,297 towards the cost of the benefits to be provided to Mr.
G. Brawley and Mr. D. Brawley under these agreements.
In 1993, the Bank entered supplemental income agreements with Mr. G.
Brawley, Mr. D. Brawley and Billy R. Williams, Secretary and Controller, and two
other employees. These agreements provide that the employee will receive an
annual retirement benefit at the earlier of age 60, if retired, or at age 65.
The annual benefit provided is $25,000, $15,000 and $7,900 for Mr. G. Brawley,
Mr. D. Brawley and Mr. Williams, respectively. However, Mr. G. Brawley's
agreement provides for benefit payments beginning on the earlier of age 60, if
retired, or November 1, 1998. A death benefit payable to the beneficiary of the
employee and a disability benefit, both equal to the retirement benefit, are
also provided under the agreements. During the fiscal year ended December 31,
1997, the Bank accrued $77,408 towards the cost of the benefits to be provided
to Mr. G. Brawley, Mr. D. Brawley and Mr. Williams under these agreements.
OTHER BENEFITS. The Bank provides its employees with group medical,
dental, life and disability insurance benefits, and its retirees with partial
payment of medical insurance dependent coverage. Employees are provided with
vacation and sick leave. The Bank maintains a 401(k) retirement plan pursuant
to which the Bank may make discretionary matches up to six percent of each
employee's salary, as well as a non-qualified excess benefit plan which allows
executive employees to contribute the maximum amount that would otherwise be
allowed under the 401(k) plan but for certain limits imposed under the Internal
Revenue Code. The Bank also had a defined benefit pension plan which was
terminated on October 20, 1997. All participants in that plan became 100%
vested on that date and received cash payment equal to their accrued benefit
under the plan. Mr. G. Brawley and Mr. D. Brawley, two of three on-staff
appraisers, also receive $50.00 per real estate loan appraisal performed for the
Bank, under guidelines adopted by the Bank's Board of Directors. Those
guidelines require outside appraisers for all loans in excess of $250,000.
8
<PAGE>
EMPLOYMENT AGREEMENTS. In connection with the Conversion, the Bank entered
into employment agreements with George W. Brawley, Jr., President and Chief
Executive Officer, Dale W. Brawley, Executive Vice President and Treasurer, and
Billy R. Williams, Secretary and Controller, in order to establish their duties
and compensation and to provide for their continued employment with the Bank.
The agreements provided for initial annual base salaries of $139,200, $84,000
and $56,400, for Mr. G. Brawley, Mr. D. Brawley and Mr. Williams, respectively.
The agreements provide for an initial term of employment of three years.
Commencing on the first anniversary date and continuing on each anniversary date
thereafter, following a performance evaluation of the employee, each agreement
may be extended for an additional year so that the remaining term shall be three
years, unless written notice of non-renewal is given by the Board of Directors.
The agreements also provide that the base salary shall be reviewed by the Board
of Directors not less often than annually. In the event of a change in control
(as defined below), each employee's base salary shall be increased by at least
6% annually and the agreements will automatically be extended so that it will
have a three-year term after the change in control. In addition, the employment
agreements provide for possible profitability and discretionary bonuses and
participation in all other pension, profit-sharing or retirement plans
maintained by the Bank or the Company for employees of the Bank, as well as
fringe benefits normally associated with the employee's office. It is
contemplated that each employee will receive holiday bonuses computed on the
same basis as those paid to other employees. See "Bonus Compensation." The
employment agreements provide that they may be terminated by the Bank for cause,
as defined in the agreements, and that they may otherwise be terminated by the
Bank (subject to vested rights) or by the employee.
The employment agreements provide that the nature of the employees'
compensation, duties or benefits cannot be diminished following a change in
control of the Bank or the Company. For purposes of the employment agreements,
a change in control generally will occur if (i) after the effective date of the
employment agreements, any "person" (as such term is defined in Sections 3(a)(9)
and 13(d)(3) of the Exchange Act) directly or indirectly, acquires beneficial
ownership of voting stock, or acquires irrevocable proxies or any combination of
voting stock and irrevocable proxies, representing 25% or more of any class of
voting securities of either the Company or the Bank, or acquires in any manner
control of the election of a majority of the directors of either the Company or
the Bank, (ii) either the Company or the Bank consolidates or merges with or
into another corporation, association or entity, or is otherwise reorganized,
where neither the Company nor the Bank is the surviving corporation in such
transaction, or (iii) all or substantially all of the assets of either the
Company or the Bank are sold or otherwise transferred to, or are acquired by,
any other entity or group. The agreements also provide that, in the event of
the employee's death following a change in control, the remaining payments to be
made under the agreements will be made to the employee's beneficiary or the
beneficiary's estate.
SEVERANCE PLAN
In connection with the Conversion, the Bank's board of directors adopted a
Severance Plan for the benefit of its employees. The Severance Plan provides
that in the event there is a "change in control" (as defined in the Severance
Plan) of the Bank or the Company and (i) the Bank or any successor of the Bank
terminates the employment of any full time employee of the Bank in connection
with, or within 24 months after the change in control, other than for "cause"
(as defined in the Severance Plan), or (ii) an employee terminates his or her
employment with the Bank or any successor following a decrease in the level of
such employee's annual base salary rate or a transfer of such employee to a
location more than 40 miles distant from the employee's primary work station
within 24 months after a change in control, the employee shall be entitled to a
severance benefit equal to the greater of (a) an amount equal to two weeks'
salary at the employee's existing salary rate multiplied times the employee's
number of complete years of service as a the Bank employee or (b) the amount of
one month's salary at the employee's salary rate at the time of termination,
subject to a maximum payment equal to one half of the employee's annual salary.
Officers of the Bank who, at the time of a "change in control," are parties to
employment agreements having a remaining term of more than two years are not
covered by the Severance Plan.
9
<PAGE>
EMPLOYEE STOCK OWNERSHIP PLAN
In connection with the Conversion, the Bank established the Employee Stock
Option Plan ("ESOP") for eligible employees of the Bank. Employees with one
year of service with the Bank who have attained age 21 are eligible to
participate. As part of the Conversion, the ESOP borrowed funds from the
Company and used the funds to purchase 53,958 shares of Common Stock.
Collateral for the Company's loan to the ESOP is the Common Stock purchased by
the ESOP. It is expected that the loan will be repaid principally from the
Bank's contributions to the ESOP over a period of 15 years or less. Regular
dividends paid on shares held by the ESOP may also be used to reduce the loan.
The loan has not been guaranteed by the Bank. Shares purchased by the ESOP and
pledged as security for the loan are held in a suspense account for allocation
among participants as the loan is repaid.
Contributions to the ESOP and shares released from the suspense account in
an amount proportional to the repayment of the ESOP loan are allocated among
ESOP participants on the basis of relative compensation in the year of
allocation. Benefits vest in full upon five years of service with credit given
for years of service prior to the Conversion. Benefits are payable upon death
or disability. The Bank's contributions to the ESOP are not fixed, so benefits
payable and corresponding expenses under the ESOP cannot be estimated.
The Bank's Board of Directors may instruct the trustees regarding
investment of funds contributed to the ESOP. Participating employees may
instruct the trustees as to the voting of all shares allocated to their
respective accounts and held in the ESOP. The unallocated shares held in the
suspense account, and all allocated shares for which voting instructions are not
received, are voted by the trustees in their discretion subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended.
PROPOSAL 1
APPROVAL OF THE CODDLE CREEK FINANCIAL CORP. STOCK OPTION PLAN
GENERAL
The Board of Directors has adopted the Stock Option Plan which is designed
to attract and retain qualified personnel in key positions, provide directors,
executive officers and employees with a proprietary interest in the Company as
an incentive to contribute to the success of the Company and reward executive
officers and employees for outstanding performance. The Stock Option Plan is
also designed to retain qualified directors for the Company. The Stock Option
Plan provides for the grant of incentive stock options intended to comply with
the requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") and nonqualified or compensatory stock options. Executive officers
and employees of the Company, the Bank and any subsidiaries will be eligible to
receive incentive stock options; directors will be eligible to receive only
nonqualified stock options. If stockholder approval is obtained, options to
acquire up to 60,703 shares of Common Stock with an exercise price equal to the
fair market value of the Common Stock on the date of grant will be awarded to
executive officers and senior employees of the Company and the Bank and to
directors of the Company. No cash consideration will be paid for the award of
the options. Options to purchase an additional 6,744 shares of Common Stock
will be reserved for future award.
DESCRIPTION OF THE STOCK OPTION PLAN
The Prospectus of the Company, dated November 22, 1997, (the "Prospectus")
delivered in connection with the Conversion and the Company's initial public
offering, contained a summary of a stock option plan and of options which could
be granted to directors, executive officers and employees of the Company and the
Bank. The stock option plan as described in the Prospectus contained certain
provisions required by the regulations of the Federal
10
<PAGE>
Deposit Insurance Corporation (the "FDIC") in the event the stockholders had
approved the plan less than twelve months following the Conversion. The Company
has decided to seek stockholder approval of the Stock Option Plan more than
twelve months after the Conversion. As a result, the FDIC regulations are no
longer applicable to the plan. Consequently, the Board decided to adopt a Stock
Option Plan with several provisions that differ from those presented in the
Prospectus, including (i) accelerated vesting of options upon retirement or a
"change in control" of the Company or the Bank; (ii) shorter vesting schedules
for options; (iii) the discretionary power to adjust the option exercise price
to reflect the effects of extraordinary dividends or returns of capital; (iv)
the discretionary power to make cash payments to holders of unexercised, vested
and unvested options equal to dividends which would have been paid on shares
subject to such options if such options had been exercised and (v) the
discretionary power to grant stock appreciation rights in tandem with stock
options. The total number of options to be issued under the Stock Option Plan
(options to purchase 10% of the number of shares issued in the Conversion) is as
described in the Prospectus. The Company anticipates issuing 30% of the options
under the Stock Option Plan to the existing nonemployee directors of the Company
and the Bank, 60% to the executive officers of the Company and the Bank and 10%
to two other senior employees of the Bank.
The following description of the Stock Option Plan is a summary of its
terms and is qualified in its entirety by reference to the Stock Option Plan, a
copy of which is attached hereto as Appendix A.
ADMINISTRATION. The Stock Option Plan will be administered and
interpreted by a committee of the Board of Directors (the "Committee") that is
composed solely of two or more "nonemployee directors" as that term is defined
by Exchange Act rules and regulations.
STOCK OPTIONS. Under the Stock Option Plan, the Board of Directors or the
Committee determines which directors, executive officers and employees will be
granted options, whether such options will be incentive or nonqualified options,
the number of shares subject to each option, whether such options may be
exercised by delivering other shares of Common Stock and when such options
become exercisable. The Stock Option Plan provides that all options will have
an option exercise price of not less than the fair market value of a share of
Common Stock on the date of grant. The fair market value will be equal to the
average of the most current bid and asked price of the Common Stock. Based upon
the average of the bid and asked price on December ____, 1998, if options had
been granted on that day, they would have an option price of $_______, the per
share market value of the Common Stock underlying the options on that date.
All options granted to participants under the Stock Option Plan shall
become vested and exercisable at the rate determined by the Committee when
making an award. Unvested options may not vest after a participant's employment
with the Company, the Bank or any subsidiary is terminated for any reason other
than the participant's death, disability or retirement. Unless the Committee
shall specifically state otherwise at the time an option is granted, all options
granted to participants shall become vested and exercisable in full on the date
an optionee terminates his employment with or service to the Company, the Bank
or any subsidiary because of his death, disability or retirement. In addition,
all stock options will become vested and exercisable in full in the event that
the optionee ceases to be an executive officer, employee or director of the Bank
or the Company for any reason following a change in control of the Company, as
defined in the Stock Option Plan. Options granted under the Stock Option Plan
will have a term of ten years. Stock options are non-transferable except by
will or the laws of descent and distribution.
Payment for shares purchased upon the exercise of options may be made
either in cash, by check, bank draft or money order or, if permitted by the
Committee, by delivering shares of Common Stock (including shares acquired
pursuant to the exercise of an option) with a fair market value equal to the
total option price, or a combination of the foregoing. To the extent an
optionee already owns shares of Common Stock prior to the exercise of his or her
option, such shares could be used (if permitted by the Committee) as payment for
the exercise price of the option. If the fair
11
<PAGE>
market value of a share of Common Stock at the time of exercise is greater than
the exercise price per share, this feature would enable the optionee to acquire
a number of shares of Common Stock upon exercise of the option which is greater
than the number of shares delivered as payment for the exercise price. Because
options may be exercised in part from time to time, the ability to deliver
Common Stock as payment of the exercise price could enable the optionee to turn
a relatively small number of shares into a larger number of shares.
STOCK APPRECIATION RIGHTS. It is expected that options granted under the
Stock Option Plan will be granted in tandem with stock appreciation rights,
pursuant to which optionees will have the right to surrender exercisable options
in exchange for payment by the Company of an amount equal to the excess of the
market value of shares of Common Stock subject to the surrendered options over
the exercise price of the surrendered options. In the discretion of the
Committee, this payment may be made in cash or in shares of Common Stock or in
some combination of cash and Common Stock. Stock appreciation rights shall
terminate upon the exercise of the options to which they are attached. Stock
appreciation rights will be subject to the same vesting and termination
provisions as are applicable to the stock options to which they are attached.
DISCRETIONARY CASH PAYMENTS. The Stock Option Plan provides that the
Company's Board of Directors shall have the discretionary authority to authorize
cash payments to the holders of unexercised options, both vested and unvested,
equal to the amount of dividends which would have been paid on shares subject to
options if the options had been exercised. No such payment may be made in
connection with dividends or other distributions which result in a reduction in
the option exercise price as described below in "Number of Shares Covered by
Stock Option Plan". If an optionee receives such a cash payment with respect to
any unvested option, and if such option is later forfeited, the optionee must
repay any cash payment made with respect to the forfeited option.
NUMBER OF SHARES COVERED BY THE STOCK OPTION PLAN. A total of 67,447
shares of Common Stock have been reserved for issuance pursuant to the Stock
Option Plan, which is 10% of the Common Stock issued in connection with the
Conversion. In lieu of issuing reserved unissued shares upon the exercise of
options, the Company may elect to purchase shares in the open market to fund
exercises of options. To the extent that exercised options are funded by
authorized but unissued shares, the interests of existing stockholders will be
diluted. In the event of a stock split, reverse stock split or stock dividend,
the number of shares of Common Stock under the Stock Option Plan, the number of
shares to which any option relates and the exercise price per share under any
option shall be adjusted to reflect such increase or decrease in the total
number of shares of Common Stock outstanding. In addition, in the event the
Company declares a special cash dividend or return of capital, the per share
exercise price of all previously granted options which remain unexercised as of
the date of such declaration may be proportionately adjusted to give effect to
such special cash dividend or return of capital as of the date of payment of
such special cash dividend or return of capital, subject to certain limitations.
AMENDMENT AND TERMINATION OF THE STOCK OPTION PLAN. Unless sooner
terminated, the Stock Option Plan shall continue in effect for a period of ten
years from the date the Stock Option Plan is approved by stockholders and
becomes effective. The Board may at any time alter, suspend, terminate or
discontinue the Stock Option Plan, subject to any applicable regulatory
requirements and any required stockholder approval or any stockholder approval
which the Board may deem advisable for any reason, such as for the purpose of
obtaining or retaining any statutory or regulatory benefits under tax,
securities or other laws or satisfying applicable stock exchange or quotation
system listing requirements. The Board may not, without the consent of the
optionee, make any alteration which would deprive the optionee of his rights
with respect to any previously granted option. Termination of the Stock Option
Plan would not affect any previously granted options.
12
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES. Under current provisions of the Code, the
federal income tax treatment of incentive stock options and nonqualified stock
options is different. Options granted to employees under the Stock Option Plan
may be "incentive stock options" which are designed to result in beneficial tax
treatment to the employee but not a tax deduction to the Company or the Bank.
The holder of an incentive stock option generally is not taxed for federal
income tax purposes on either the grant or the exercise of the option. However,
the optionee must include in his or her federal alternative minimum tax income
any excess (the "Bargain Element") of the acquired Common Stock's fair market
value at the time of exercise over the exercise price paid by the optionee.
Furthermore, if the optionee sells, exchanges, gives or otherwise disposes of
such Common Stock (other than in certain types of transactions) either within
two years after the option was granted or within one year after the option was
exercised (an "Early Disposition"), the optionee generally must recognize the
Bargain Element as compensation income for regular federal income tax purposes.
Any gain realized on the disposition in excess of the Bargain Element is subject
to recognition under the usual rules applying to dispositions of property. If a
taxable sale or exchange is made after such holding periods are satisfied, the
difference between the exercise price and the amount realized upon the
disposition of the Common Stock generally will constitute a capital gain or loss
for tax purposes. If an optionee exercises an incentive stock option and
delivers shares of Common Stock as payment for part or all of the exercise price
of the stock purchased (the "Payment Stock"), no gain or loss generally will be
recognized with respect to the Payment Stock; provided, however, if the Payment
Stock was acquired pursuant to the exercise of an incentive stock option, the
optionee will be subject to recognizing as compensation income the Bargain
Element on the Payment Stock as an Early Disposition if the exchange for the new
shares occurs prior to the expiration of the holding periods for the Payment
Stock. The Company generally would not recognize gain or loss or be entitled to
a deduction upon either the grant of an incentive stock option or the optionee's
exercise of an incentive stock option. However, if there is an Early
Disposition, the Company generally would be entitled to deduct the Bargain
Element as compensation paid to the optionee.
Options granted to directors under the Stock Option Plan would be
"nonqualified stock options." In general, the holder of a nonqualified stock
option will recognize compensation income equal to the amount by which the fair
market value of the Common Stock received on the date of exercise exceeds the
sum of the exercise price and any amount paid for the nonqualified stock option.
If the optionee elects to pay the exercise price in whole or in part with Common
Stock, the optionee generally will not recognize any gain or loss on the Common
Stock surrendered in payment of the exercise price. The Company would not
recognize any income or be entitled to claim any deduction upon the grant of a
nonqualified stock option. At the time the optionee is required to recognize
compensation income upon the exercise of the nonqualified stock option, the
Company would recognize a compensation expense and be entitled to claim a
deduction in the amount equal to such compensation income.
The above description of tax consequences under federal law is necessarily
general in nature and does not purport to be complete. Moreover, statutory
provisions are subject to change, as are their interpretations, and their
application may vary in individual circumstances. Finally, the consequences
under applicable state and local income tax laws may not be the same as under
the federal income tax laws.
ACCOUNTING TREATMENT. Neither the grant nor the exercise of an incentive
stock option or a nonqualified stock option under the Stock Option Plan
currently requires any charge against earnings under generally accepted
accounting principles. In October 1995, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No.
123, "Accounting for Stock-Based Compensation," which is effective for
transactions entered into after December 15, 1995. SFAS No. 123 (i) establishes
financial accounting and reporting standards for stock-based employee
compensation plans, (ii) defines a fair value method of accounting for an
employee stock option or similar equity instrument, and (iii) encourages all
entities to adopt that method of accounting for all of their employee stock
compensation plans. However, it also allows an entity to continue to measure
compensation cost for those plans using the intrinsic value method of accounting
prescribed by APB
13
<PAGE>
Opinion No. 25, "Accounting for Stock Issued to Employees." Under the fair value
method, compensation cost is measured at the grant date based on the value of
the award and is recognized over the service period, which is usually the
vesting period. Under the intrinsic value method, compensation cost is the
excess, if any, of the quoted market price of the stock at grant date or other
measurement date over the amount an employee must pay to acquire the stock. The
Company anticipates that it will use the intrinsic value method, in which event
pro forma disclosure will be included in the footnotes to the Company's
financial statements to show what net income and earnings per share would have
been if the fair value method had been utilized. If the Company elects to
utilize the fair value method, its net income and earnings per share may be
adversely affected.
STOCKHOLDER APPROVAL. No options will be granted under the Stock Option
Plan unless the Stock Option Plan is approved by the stockholders.
OPTIONS TO BE GRANTED. The Committee intends to grant options to
directors, executive officers and employees of the Company and the Bank at a yet
undetermined time following stockholder approval of the Stock Option Plan. Only
forfeited options will be subject to allocation later, unless the Stock Option
Plan is amended. At this time, approximately _____ persons would be eligible to
participate under the Stock Option Plan. No options will be granted to any
associates of any of the directors or executive officers of the Company or the
Bank. The table on page 18 sets forth in column two information with respect to
the number of options that the Company anticipates would be granted to
directors, executive officers and other senior employees as a group upon
stockholder approval of the Stock Option Plan.
It is currently anticipated that 25% of the aggregate number of options
granted to directors, executive officers and senior employees of the Company and
the Bank will be vested and exercisable on the date of grant and 25% of the
aggregate number of such options granted will vest and become exercisable on
each of the next three annual anniversary dates thereafter.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE CODDLE CREEK
---
FINANCIAL CORP. STOCK OPTION PLAN.
14
<PAGE>
PROPOSAL 2
APPROVAL OF THE MOORESVILLE SAVINGS BANK, INC., SSB
MANAGEMENT RECOGNITION PLAN
GENERAL
The Boards of Directors of the Company and the Bank have adopted and desire
to establish the Management Recognition Plan (the "MRP"), the objective of which
is to encourage the continued service of directors, officers and employees of
the Bank. The MRP will provide directors, officers and employees with an
ownership interest in the Company in a manner designed to serve as an incentive
to contribute to the success of the Bank and the Company and to reward employees
for outstanding performance. All directors, officers and employees of the Bank
are eligible for participation in the MRP.
DESCRIPTION OF THE MRP
As with the Stock Option Plan and as discussed under Proposal 1, the MRP as
described in the Prospectus contained certain provisions that were required by
the FDIC if stockholder approval of the plan was obtained less than twelve
months after the Conversion. Several provisions of the proposed MRP described
below differ from those disclosed in the Prospectus, including a shorter vesting
period and accelerated vesting upon retirement or a "change in control" of the
Company or the Bank. The Company and the Bank anticipate that 30% of the
restricted shares under the MRP will be awarded to nonemployee directors, 60% to
executive officers and 10% to other senior employees. The following description
of the MRP is a summary of its terms and is qualified in its entirety by
reference to the MRP, a copy of which is attached hereto as Appendix B.
ADMINISTRATION. The MRP will be administered and interpreted by a
committee of the board of directors of the Bank (the "MRP Committee") that is
composed solely of two or more "nonemployee directors", as defined by Exchange
Act.
AWARDS OF RESTRICTED STOCK. Upon stockholder approval, the MRP will
acquire 26,979 shares of Common Stock, which is equal to 4% of the Common Stock
issued in the Conversion. It is anticipated that 24,281 of these shares of
Common Stock will be awarded immediately under the plan and another 2,429 shares
will be reserved for future award. These shares either will be purchased on the
open market or issued from authorized but unissued shares of Common Stock. To
the extent that the MRP acquires authorized but unissued shares, the interests
of existing stockholders will be diluted.
Shares of Common Stock granted pursuant to the MRP will be in the form of
restricted stock which will vest over a period of time determined by the MRP
Committee. Shares issued under the MRP will be issued at no cost to recipients.
A recipient will be entitled to all voting and other stockholder rights with
respect to shares which have been awarded under the MRP, including receipt of
any cash or stock dividends declared with respect to unvested share awards.
Such unvested shares may not be sold, pledged or otherwise disposed of.
If a recipient terminates employment for reasons other than death,
disability or retirement, the recipient will forfeit all rights to the allocated
shares which have not yet vested and must return any cash or stock dividends
received with respect to the forfeited MRP shares. All shares subject to an
award held by a recipient whose employment with or service to the Company, the
Bank or any subsidiary terminates due to death, disability or
15
<PAGE>
retirement, as defined in the MRP, shall be vested as of the recipient's last
day of employment with or service to the Company, the Bank or any subsidiary and
shall be distributed as soon as practicable thereafter. All shares subject to an
award held by a recipient also shall be fully vested in the event the recipient
ceases to be an employee or director of the Bank or the Company for any reason
following a change in control of the Company or the Bank, as defined in the MRP.
AMENDMENT AND MODIFICATION OF THE MRP. The board of directors of the Bank
may at any time amend or modify the MRP in any respect, subject to applicable
regulatory requirements and required stockholder approvals. However, any
amendment or modification of the MRP shall not in any manner affect any award of
shares made previously to a recipient under the Plan without the consent of such
recipient.
FEDERAL INCOME TAX CONSEQUENCES. Pursuant to Section 83 of the Code,
recipients of MRP awards will recognize ordinary income in an amount equal to
the fair market value of the shares of Common Stock granted to them at the time
that the shares vest and become transferable. The Company will be entitled to
deduct as a compensation expense for tax purposes the same amounts recognized as
income by recipients of MRP awards in the year in which such amounts are
included in income.
ACCOUNTING TREATMENT. For a discussion of SFAS No. 123, see "Proposal 1 -
Approval of Coddle Creek Financial Corp. Stock Option Plan - Accounting
Treatment." Under the intrinsic value method, the Company will also recognize a
compensation expense as shares of Common Stock granted pursuant to the MRP vest.
The amount of compensation expense recognized for accounting purposes is based
upon the fair market value of the Common Stock at the date of grant to
recipients, rather than the fair market value at the time of vesting for tax
purposes.
STOCKHOLDER APPROVAL. No shares will be granted under the MRP unless it is
approved by the stockholders.
SHARES TO BE GRANTED. The MRP Committee intends to grant awards of
restricted stock to directors, executive officers and two other senior employees
of the Bank promptly after the date of stockholder approval of the MRP. At this
time approximately _____ persons would be eligible to participate under the MRP.
The following table sets forth certain information with respect to awards the
Company and the Bank anticipate would be made upon stockholder approval of the
Stock Option Plan and the MRP. Column two lists the options that the Company
anticipates would be granted to directors, executive officers and other senior
employees as a group under the Stock Option Plan; column three lists the number
of shares of Common Stock the Bank anticipates would be awarded to directors,
executive officers and other employees as a group under the MRP. Column four
sets forth the dollar value of the stock awards assuming a value per share of
Common Stock equal to $_______, which was the average of the bid and asked price
on December ____, 1998. This valuation is without regard to the restrictions on
the shares of Common Stock awarded under the Management Recognition Plan.
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<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION/1/ STOCK OPTION PLAN MANAGEMENT RECOGNITION PLAN
-------------------- ----------------- ---------------------------
NUMBER OF SHARES
----------------
SUBJECT TO STOCK NUMBER OF
---------------- ---------
NONEMPLOYEE DIRECTORS OPTIONS SHARES DOLLAR VALUE/2/
- --------------------- ----------------- ---------- ---------------
<S> <C> <C> <C>
Willis L. Barnette 3,372 1,349 $____________
Donald R. Belk 3,372 1,349 $____________
Jack G. Lawler 3,372 1,349 $____________
Claude U. Voils, Jr. 3,372 1,349 $____________
------ ------
Total (4 persons) 13,488 5,396 $
====== ====== =============
EXECUTIVE OFFICERS
- ------------------
George W. Brawley, Jr., President, CEO and 16,862 6,745 $____________
Chairman of Board of Directors
Dale W. Brawley, Executive Vice President, 16,862 6,745 $____________
Treasurer and Director
Billy R. Williams, Secretary and Controller 6,745 2,697 $____________
------ ------
Total (3 persons) 40,469 16,187 $
====== ====== =============
NON-EXECUTIVE OFFICER EMPLOYEES GROUP
(2 persons) 6,746 2,698 $____________
ASSOCIATES OF EXECUTIVE OFFICERS AND
DIRECTORS 0 0 $ 0
--------
</TABLE>
________________________
/1/Position with Company, unless otherwise indicated.
/2/Based upon the average of the bid and asked price for the Common Stock on
December ____, 1998./
It is currently anticipated that 25% of the aggregate number of shares
granted to directors, executive officers and senior employees will be vested on
the date of grant promptly after stockholder approval of the MRP and that 25% of
the aggregate number of shares granted will vest on each of the next three
annual anniversary dates thereafter.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE MOORESVILLE
---
SAVINGS BANK, INC., SSB MANAGEMENT RECOGNITION PLAN.
17
<PAGE>
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Stockholders are being asked to approve the Stock Option Plan and MRP. As
set forth above, the Stock Option Plan and MRP will not be effective without the
required stockholder approval. Members of the management and the Boards of
Directors of the Company and the Bank, most of whom are stockholders and who, as
a group, have voting control over 101,751 shares (15.09%) of the Common Stock,
will be participants of these plans. See "Proposal 1 - Approval of the Coddle
Creek Financial Corp. Stock Option Plan" and "Proposal 2 - Approval of the
Mooresville Savings Bank, Inc., SSB Management Recognition Plan."
DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS
It is presently anticipated that the 1998 Annual Meeting of Stockholders
will be held in April of 1999. In order for stockholder proposals to be
included in the proxy material for that meeting, such proposals must have been
received by the Secretary of the Company at the Company's principal executive
office not later than November 20, 1998, and met all other applicable
requirements for inclusion therein.
The Company's Bylaws provide that, in order to be eligible for
consideration at an annual meeting of stockholders, all nominations of
directors, other than those made by the Company's Board of Directors, must be
made in writing and must be delivered to the Secretary of the Company not less
than 50 days nor more than 90 days prior to the meeting at which such
nominations will be made; provided, however, if less than 21 days notice of the
meeting is given to stockholders, such nominations must be delivered to the
Secretary of the Company not later than the close of business on the seventh day
following the day on which the notice of meeting was mailed.
By Order of the Board of Directors
/s/ BILLY R. WILLIAMS
Billy R. Williams
Secretary
Mooresville, North Carolina
December 29, 1998
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<PAGE>
APPENDIX B
MOORESVILLE SAVINGS BANK, SSB
MANAGEMENT RECOGNITION PLAN
Mooresville Savings Bank, SSB (the "Bank"), does herein set forth the terms
of its Management Recognition Plan (the "Plan").
Section 1. Purpose of this Plan. The purpose of this Plan is to provide
---------- --------------------
to the directors, officers and employees (the "Participants") of the Bank and of
any corporation or other entity of which the Bank owns, directly or indirectly,
not less than fifty percent (50%) of any class of the equity securities thereof
(a "Subsidiary"), an ownership interest in the Bank's parent holding company,
Coddle Creek Financial Corp. (the "Corporation") by making awards (hereinafter
referred to as "Awards" or singularly, "Award") of shares of common stock of the
Corporation (the "Common Stock"). The Board of Directors of the Bank (the
"Board") and the board of directors of the Corporation believe that
participation in the ownership of the Corporation will induce Participants to
continue to serve the Bank or any Subsidiary as directors, officers and/or
employees and encourage them to contribute to the future growth and profits of
the Bank and the Corporation. In addition, the existence of this Plan will make
it possible for the Bank and its Subsidiaries to attract capable individuals to
serve as directors or officers of the Bank and its Subsidiaries. The Board
believes that the existence of this Plan will provide incentives to the
directors, officers and employees of the Bank and any Subsidiaries which will
contribute materially to the success of such companies.
Section 2. Administration of this Plan.
---------- ---------------------------
(a) This Plan shall be administered by a committee of the Board (the
"Committee") which shall consist of not less than two members of the Board who
are "Non-Employee Directors" as defined in Rule 16 b-3(b)(3) of the Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). In the absence of a duly appointed Committee, the Plan shall be
administered by the Board. The Committee shall have full power and authority to
construe, interpret and administer this Plan. All actions, decisions,
determinations, or interpretations of the Committee shall be final, conclusive,
and binding upon all parties. Members of the Committee shall serve at the
pleasure of the Board.
(b) The Committee shall decide (i) to whom Awards shall be made under
this Plan, (ii) the number of shares of Common Stock subject to each award,
(iii) the number of additional shares, if any, to be purchased or allocated for
the purposes of this Plan, (iv) the determination of leaves of absence which may
be granted to Participants without constituting a termination of their
employment for purposes of the Plan and (v) such additional terms and conditions
for Awards as the Committee shall deem appropriate, including, without
limitation, any determinations as to the restrictions or conditions on transfer
of shares of Common Stock that are necessary or appropriate to satisfy all
applicable securities laws, rules, regulations, and listing requirements.
(c) The Committee may designate any officers or employees of the Bank
or of any Subsidiary to assist in the administration of this Plan. The
Committee may authorize such individuals to execute documents on its behalf and
may delegate to them such other ministerial and limited discretionary duties as
the Committee may see fit.
<PAGE>
(d) Any unallocated, undistributed or forfeited shares of Common Stock
held under this Plan shall be held by the Committee.
Section 3. Eligibility and Awards.
---------- ----------------------
(a) The Participants in this Plan to whom Awards may be made shall be
the following: members of the Board, members of the board of directors of the
Corporation or any Subsidiary, and such officers and employees of the Bank, the
Corporation and/or of any Subsidiary as may be designated by the Committee.
(b) As promptly as practicable after a determination is made that an
Award of Common Stock is to be made, the Committee shall notify the Participant
in writing of the grant of the Award, the number of shares of Common Stock
covered by the Award, and the terms upon which the Common Stock subject to the
Award shall vest and be distributed to the Participant. Awards of Common Stock
under this Plan shall be effective upon execution and delivery of the Stock
Grant Agreement which sets forth the terms and conditions of the Award of Common
Stock (the "Stock Grant Agreement").
(c) Notwithstanding anything to the contrary contained in Sections
3(a) and 3(b) above, no Participant shall have any right or entitlement to
receive an Award hereunder, such awards being at the total discretion of the
Committee.
Section 4. Vesting and Distribution of Common Stock.
---------- ----------------------------------------
(a) Awards made under this Plan shall vest and the right of a
Participant to the Award shall be nonforfeitable as determined by the Committee
and as set forth in the Stock Grant Agreement.
(b) In determining the number of shares vested under any applicable
vesting schedule, a Participant shall not receive fractional shares. If the
product resulting from multiplying the vested percentage times the allocated
shares results in a fractional share, then a Participant's vested right shall be
rounded down to the nearest whole number of shares.
(c) In the event any Participant shall no longer be either a director
or an employee of the Bank, the Corporation or any Subsidiary for any reason
(whichever position resulted in the Award, as set forth in the Stock Grant
Agreement), other than as provided in Sections 4(d) and 4(e) below, and such
Participant does not have a 100% vested interest in his or her shares under the
Plan, then any shares which are not vested based upon the applicable schedule
set forth in the Stock Grant Agreement shall be forfeited and, provided this
Plan has not terminated pursuant to Section 14 below, shall be available again
for Awards to Participants as may be determined by the Committee.
(d) In the event that a Participant shall no longer be an employee or
a director of the Bank, the Corporation or any Subsidiary (whichever position
resulted in the award, as set forth in the Stock Grant Agreement), because of
such Participant's retirement, disability or death, prior to the date when all
shares allocated to him or her would be 100% vested in accordance with the
schedule set forth
2
<PAGE>
in the Stock Grant Agreement, then, notwithstanding such vesting schedule, all
shares allocated to such Participant shall immediately become fully vested and
nonforfeitable. For purposes of this Plan, the term "disability" shall be
defined in the same manner as such term is defined in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the "Code").
For purposes of this Plan, the term "retirement," as it relates to any
Participant receiving an Award as a result of his position as an employee of
the Corporation, the Bank or any Subsidiary, shall mean (i) the termination of
the Participant's employment under conditions which would constitute retirement
under any tax qualified retirement plan maintained by the Corporation, the Bank
or a Subsidiary, or (ii) termination of employment after attaining age 65. The
term "retirement," as it relates to any Participant receiving an Award as a
result of his position as a director shall mean the cessation of membership on
such board of directors (i) with the approval of such board of directors, at any
time after such Participant reaches age 65, or (ii) at the election of the
Participant at any time after not less than 15 years of service as a member of
the such board of directors, as applicable.
(e) In the event that a Participant ceases to be an employee or a
director of the Bank, the Corporation or a Subsidiary (whichever position
resulted in the award, as set forth in the Stock Grant Agreement), for any
reason after the occurrence of a "change in control" and prior to the time that
all shares allocated to him or her would be 100% vested in accordance with the
schedule set forth in the Stock Grant Agreement, then, notwithstanding such
vesting schedule, all shares allocated to such Participant shall immediately
become fully vested and nonforfeitable. For purposes of this Plan, a "change in
control" shall mean (i) a change in control of a nature that would be required
to be reported by the Corporation in response to Item 1 of the Current Report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Exchange Act; (ii) such time as any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) other than the Corporation is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Corporation or Bank
representing 25 percent or more of the combined voting power of the outstanding
Common Stock of the Corporation or outstanding common stock of the Bank, as
applicable; or (iii) individuals who constitute the board of directors of the
Corporation or the Board on the date hereof (the "Incumbent Board" and
"Incumbent Bank Board," respectively) cease for any reason to constitute at
least a majority thereof, provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board or Incumbent Bank
Board, as applicable, or whose nomination for election by the Corporation's or
Bank's shareholders was approved by the Corporation's or Bank's Board of
Directors or Nominating Committee, shall be considered as though he or she were
a member of the Incumbent Board or Incumbent Bank Board, as applicable; or (iv)
either the Corporation or the Bank consolidates or merges with or into another
corporation, association or entity or is otherwise reorganized, where neither
the Corporation nor the Bank, respectively, is the surviving corporation in such
transaction; or (v) all or substantially all of the assets of either the
Corporation or the Bank are sold or otherwise transferred to or are acquired by
any other entity or group.
(f) Shares of Common Stock which have vested shall be distributed to
the Participant or any transferee permitted by Section 10 (a "Permitted
Transferee"), as the case may be, as soon as practicable after such shares of
Common Stock have vested in accordance with the schedule contained in the Stock
Grant Agreement.
3
<PAGE>
(g) The Corporation, the Bank and any Subsidiary shall have the right
to require any Participant or Permitted Transferee to remit to the Corporation,
the Bank or any Subsidiary an amount sufficient to satisfy any federal, state
and/or local withholding tax requirements prior to the delivery or release of
any certificate or certificates for shares or delivery of any cash or other
assets with respect to shares or otherwise pursuant to this Plan.
Alternatively, the Corporation, Bank and any Subsidiary may deliver or release
shares or make other distributions of cash or other assets net of the number of
shares or cash sufficient to satisfy the withholding tax requirements. For
withholding tax purposes, the shares, cash and other assets to be distributed
shall be valued on the date the withholding obligation is incurred.
(h) Each Participant receiving an Award under this Plan shall deliver
to the Bank a Stock Grant Agreement, which shall be signed by such Participant.
Section 5. Restrictions on Selling of Shares. Awards of Common Stock may
---------- ---------------------------------
not be sold, assigned, pledged or otherwise disposed of prior to the time that
they are vested and distributed pursuant to the terms of this Plan. The Board
or the Committee may require the Participant or his Permitted Transferee, as the
case may be, to agree not to sell or otherwise dispose of his distributed shares
except in accordance with all then applicable federal and state securities laws,
and the Board or the Committee may cause a legend to be placed on the stock
certificate(s) representing the distributed shares in order to restrict the
transfer of the distributed shares for such period of time or under such
circumstances as the Board or the Committee, upon the advice of counsel, may
deem appropriate.
Section 6. Effect of Award on Status of Participant. The fact that an
---------- ----------------------------------------
Award is made to a Participant under this Plan shall not confer on such
Participant any right to continued service on the Board or on the board of
directors of the Corporation or any Subsidiary, nor any right to continued
employment with the Bank, the Corporation or any Subsidiary; nor shall it limit
the right of the Bank, the Corporation, or any Subsidiary to remove such
Participant from any such boards, or to terminate his or her employment at any
time.
Section 7. Voting Rights; Dividends; Other Distributions. After an Award
---------- ---------------------------------------------
has been made, the Participant or Permitted Transferee shall be entitled to
receive all cash dividends declared upon the shares awarded and to direct the
Committee as to the voting of the shares which are covered by the Award and
which are not yet vested and distributed to him, subject to rules and procedures
adopted by the Committee for this purpose. All shares of Common Stock which
have been awarded as to which Participants or Permitted Transferees have not
directed the voting shall be voted by the Committee in the same proportion as
the trustees of the Bank's Employee Stock Ownership Plan vote Common Stock held
in trust associated therewith, and in the absence of any such voting, shall be
voted in the manner directed by the Board.
Notwithstanding the foregoing, if a Participant or Permitted
Transferee hereunder forfeits any Awards pursuant to the terms of this Plan, the
Participant or Permitted Transferee, as applicable, shall, within 30 days after
the effective date of such forfeiture, pay the Corporation an amount equal to
the dividends received by such Participant or Permitted Transferee with respect
to such forfeited Awards.
4
<PAGE>
Section 8. Adjustment Upon Changes in Capitalization; Dissolution or
---------- ---------------------------------------------------------
Liquidation. In the event of a change in the number or type of shares of Common
- -----------
Stock outstanding, or in the event shares of Common Stock are decreased, changed
into or exchanged for securities of a different entity, by reason of a
reclassification, recapitalization, reorganization, other similar capital
adjustment, by reason of a merger or consolidation of the Corporation, by
reason of the sale by the Corporation of all or a substantial portion of its
assets, or by reason of the occurrence of any other event which could affect the
implementation of this Plan and the realization of its objectives, the number or
kind of shares subject to Awards which have occurred, or could occur, under this
Plan shall be proportionately and equitably adjusted by the Committee.
Section 9. Non-Transferability. Prior to the time Awards become vested
---------- -------------------
and are distributed by the Committee, Awards may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution. Notwithstanding the foregoing, or any
other provision of this Plan, a Participant who holds Awards may transfer such
Awards to his or her spouse, lineal ascendants, lineal descendants, or to a duly
established trust for the benefit of one or more of these individuals. Awards
so transferred may thereafter be transferred only to the Participant who
originally received the grant or to an individual or trust to whom the
Participant could have initially transferred the Awards pursuant to this Section
9. Awards which are transferred pursuant to this Section 9 shall be subject to
the same terms and conditions as applied to the Participant. In addition, such
shares may be tendered in response to a tender offer for or a request or
invitation to tenders of greater than fifty percent (50%) of the outstanding
Common Stock and may be surrendered in a merger, consolidation or share exchange
involving the Corporation; provided, however, in each case, that except as
otherwise provided herein, the securities or other consideration received in
exchange therefor shall thereafter be subject to the restrictions and conditions
set forth in this Plan.
Section 10. Impact of Award on Other Benefits of Participant. The value
----------- ------------------------------------------------
of any Award, either on the date of the Award or at the time such shares become
vested, shall not be includable as compensation or earnings for purposes of any
other benefit plan offered by the Bank, the Corporation or any Subsidiary other
than any qualified employee benefit plan which provides that such value shall be
included as compensation or earnings for purposes of such plan.
Section 11. Corporate Action. The making of an Award under this Plan
----------- ----------------
shall not affect in any way the right or power of the Corporation or its
shareholders or the Bank or its shareholders or any Subsidiary or its
shareholders to make or authorize any adjustment, recapitalization,
reorganization, or other change in the Corporation's, the Bank's or any
Subsidiary's capital structure or its business, or any merger or consolidation
of the Corporation, the Bank or any Subsidiary, or the issuance of any bonds,
debentures, preferred or other capital stock or rights with respect thereto, or
the dissolution or liquidation of the Corporation, the Bank or any Subsidiary,
or any sale or transfer of all or any part of the Corporation's, the Bank's or
any Subsidiary's assets or business.
Section 12. Exculpation and Indemnification. In connection with this
----------- -------------------------------
Plan, no member of the Board, no member of the board of directors of the
Corporation and no member of the Committee shall be personally liable for any
act or omission to act in his capacity as a member of the Board, the board of
directors of the Corporation or the Committee, nor for any mistake in judgment
made in good faith, unless arising out of, or resulting from, such person's own
bad faith, willful misconduct, or
5
<PAGE>
criminal acts. To the extent permitted by applicable law and regulation, the
Bank shall indemnify, defend and hold harmless the members of the Board, the
members of the board of directors of the Corporation, the members of the board
of directors of any Subsidiary, and the Committee and each other officer or
employee of the Bank, the Corporation or of any Subsidiary to whom any duty or
power relating to the administration or interpretation of this Plan may be
assigned or delegated, from and against any and all liabilities (including any
amount paid in settlement of a claim with the approval of the Board) and any
costs or expenses (including counsel fees) incurred by such persons arising out
of, or as a result of, any act or omission to act in connection with the
performance of such person's duties, responsibilities, and obligations under
this Plan, other than such liabilities, costs, and expenses as may arise out of,
or result from, the bad faith, willful misconduct, or criminal acts of such
persons.
Section 13. Amendment and Modification of this Plan. The Board may at
----------- ---------------------------------------
any time, and from time to time, amend or modify this Plan (including the form
of Stock Grant Agreement) in any respect, subject to any applicable regulatory
requirements and any required stockholder approval or any stockholder approval
which the Board may deem advisable for any reason, such as for the purpose of
obtaining or retaining any statutory or regulatory benefits under tax,
securities or other laws or satisfying applicable stock exchange or quotation
system listing requirements. However, any amendment or modification of this
Plan shall not in any manner affect any Award theretofore made to a Participant
under this Plan without the consent of such Participant or any Permitted
Transferee of such Participant.
Section 14. Termination and Expiration of this Plan. This Plan may be
----------- ---------------------------------------
abandoned, suspended, or terminated, in whole or in part, at any time by the
Board; provided, however, that abandonment, suspension, or termination of this
Plan shall not affect any Award theretofore made under this Plan. Unless sooner
terminated, this Plan shall terminate at the close of business on the day that
is the tenth (10th) anniversary of the date of approval of the Plan by the
shareholders of the Corporation; and no Award may be made under this Plan
thereafter. Such termination shall not effect any Award theretofore made.
Section 15. Miscellaneous.
----------- -------------
(a) This Plan has been adopted by the Board to be effective as of the date
of approval of the Plan by the shareholders of the Corporation.
(b) Captions and paragraph headings used herein are for convenience only,
do not modify or affect the meaning of any provision herein, are not a part
hereof, and shall not serve as a basis for interpretation or construction of
this Plan. As used herein, the masculine gender shall include the feminine and
neuter, and the singular number shall include the plural, and vice versa,
whenever such meanings are appropriate.
(c) All costs and expenses incurred in the operation and administration of
this Plan shall be borne by the Bank or by a Subsidiary.
(d) Without regard to the principles of conflicts of laws, the laws of the
State of North Carolina shall govern and control the validity, interpretation,
performance, and enforcement of this Plan.
(e) A copy of this Plan, and any amendments thereto, shall be maintained
by the Secretary of the Bank and shall be shown to any proper person making
inquiry about it.
6
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF IREDELL
STOCK GRANT AGREEMENT
THIS STOCK GRANT AGREEMENT (the "Agreement") is made and entered into as of
the ____ of ___________________, _______ (the "Effective Date"), by and among
Mooresville Savings Bank, SSB (the "Bank"), and
_______________________________________________ (the "Participant").
WHEREAS, a Management Recognition Plan (the "Plan") was adopted by the
Board of Directors of the Bank (the "Bank") and approved by the Board of
Directors and by the shareholders of Coddle Creek Financial Corp., the holding
company of the Bank (the "Corporation") on ____________, 1999.
WHEREAS, it has been determined that it is desirable and in the best
interest of the Bank to make an award (the "Award") of certain shares of the
Common Stock of the Corporation, under the Plan, to the Participant, subject to
certain restrictions as specified below; and
WHEREAS, capitalized terms not otherwise defined herein shall have the same
meaning given to such terms in the Plan.
NOW, THEREFORE, the Parties agree as follows:
1. Date of Award. The date of making the Award under this Agreement is
-------------
the _____ day of _________________, 1999. This Award has been made in
recognition of the Participant's status and service as a ____________________ of
_____________________________________________. The Participant is ____ or _____
is not a director or executive officer of the Bank.
2. Award of Plan Shares. The Participant is awarded, in the aggregate,
--------------------
___________________________ (__________) shares of Common Stock (the "Plan
Shares"), which shares become vested and nonforfeitable pursuant to paragraph 5
of this Agreement.
3. Investment Representation and Transfer Restrictions.
---------------------------------------------------
(a) Investment Representation. Participant makes and agrees to the
-------------------------
investment representation, if any, attached hereto as Annex A, and the
Management Recognition Plan Committee (the "Committee") may cause a legend to be
placed on any certificate representing any of the Plan Shares to make
appropriate reference to such representation, as necessary.
(b) Securities Law and Regulations. The Participant agrees that the
-------------------------------
Plan Shares shall be subject to such stop-transfer orders and other restrictions
as the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange or
interdealer quotation system upon which the Common Stock is then listed and any
other applicable federal or state securities laws, rules or regulations, and the
Committee may cause a legend or legends to be placed on any certificate
representing any of the Plan Shares to make appropriate reference to such
restrictions.
1
<PAGE>
4. Vesting and Delivery of Plan Shares by the Committee.
----------------------------------------------------
(a) Periodic Vesting. Plan Shares shall vest and become
----------------
nonforfeitable in accordance with the following schedule:
_________ shares on ___________________, 1999
_________ shares on ___________________, 2000
_________ shares on ___________________, 2001
_________ shares on ___________________, 2002
In addition, Plan Shares shall become vested and nonforfeitable upon retirement,
disability, death and a change in control as set forth in the Plan.
(b) Delivery of Vested Plan Shares to the Participant. After the date
-------------------------------------------------
on which the Plan Shares have become vested as provided in this Agreement and in
the Plan, the Committee shall deliver to the Participant, the Participant's
designee, such other person as shall have been designated as Participant's
beneficiary in accordance with this Agreement, or any other permitted recipient
pursuant to the Plan, as applicable, certificates representing the Plan Shares
which have become vested and nonforfeitable, as the Committee shall determine,
free from any restrictions imposed by this Agreement other than such
restrictions and conditions as may be deemed necessary by the Committee pursuant
to paragraph 3 above.
(c) Delivery of Forfeited Plan Shares. If the Plan Shares, or any of
---------------------------------
them, are forfeited pursuant to the Plan, the Committee shall determine the
appropriate disposition of such forfeited shares. Thereafter such forfeited
shares shall cease to be subject to this Agreement.
5. Repayment of Dividends. If the Participant forfeits Plan Shares
----------------------
pursuant to the Plan, the Participant shall, within 30 days after the effective
date of such forfeiture, pay the Corporation an amount equal to the dividends
received by the Participant with respect to forfeited Plan Shares as set forth
in the Plan.
6. Designation of Beneficiary. The Participant hereby designates the
--------------------------
person(s) described on Annex B as the beneficiary or beneficiaries who shall be
entitled to receive the Plan Shares and other assets, if any, distributable to
the Participant upon his death. The Participant may, from time to time, revoke
or change his beneficiary designation without the consent of any prior
beneficiary, if any, by filing a new designation with the Committee. The last
such designation received by the Committee shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall be
effective unless received by the Committee prior to the Participant's death, and
in no event shall it be effective as of a date prior to such receipt.
If no such beneficiary designation is in effect at the time of the
Participant's death, or if no designated beneficiary survives the Participant,
or if such designation conflicts with law, the Participant's estate shall be
deemed to have been designated his beneficiary and shall receive the Plan Shares
and other assets, if any, distributable to the Participant upon his death. If
the Committee is in doubt as to the right of any person to receive such
distribution, the Committee may retain the Plan Shares and other assets, without
liability for any interest in respect thereof, until the rights thereto are
2
<PAGE>
determined, or the Committee may transfer such Plan Shares into any court of
appropriate jurisdiction and such transfer shall be deemed a complete discharge
of the obligations of the Bank, the Corporation, and the Committee hereunder.
7. Effect of Award on Status of Participant. The fact that an Award has
----------------------------------------
been made to the Participant under this Plan shall not confer on the Participant
any right to continued service on the Board, on the board of directors of the
Corporation or on the board of directors of any Subsidiary, nor to continued
employment with the Bank, the Corporation or any Subsidiary; nor shall it limit
the right of the Bank, the Corporation or of any Subsidiary to remove the
Participant from any such boards, or to terminate his employment at any time
without prior notice.
8. Impact of Award on Other Benefits of Participant. The value of the
------------------------------------------------
Plan Shares on the date of the Award or at the time the Plan Shares become
vested, shall not be includable as compensation or earnings for purposes of any
other benefit plan offered by the Bank, the Corporation or any Subsidiary other
than any qualified employee benefit plan which provides that such value shall be
included as compensation or earnings for purposes of such plans.
9. Tax Withholding. All Plan Shares distributed pursuant to this
---------------
Agreement shall be subject to applicable federal, state and local withholding
for taxes. The Participant expressly acknowledges and agrees to such
withholding without regard to whether the Plan Shares may then be sold or
otherwise transferred by the Participant. The Participant acknowledges and
agrees to the tax withholding provisions which are set forth in the Plan.
10. Notices. Any notices or other communications required or permitted to
-------
be given under this Agreement shall be in writing and shall be deemed to have
been sufficiently given if delivered personally or three (3) business days after
deposit in the United States mail by Certified Mail, return receipt requested,
properly addressed and postage prepaid, if to the Bank or the Committee at the
Bank's principal office address at 347 North Main Street, Mooresville, North
Carolina 28115; and, if to the Participant, at his last address appearing on the
books of the Bank. The Bank and the Participant may change their address or
addresses by giving written notice of such change as provided herein. Any
notice or other communication hereunder shall be deemed to have been given on
the date actually delivered or as of the third (3rd) business day following the
date mailed as set forth above, as the case may be.
11. Construction Controlled by Plan. The Plan, a copy of which is
-------------------------------
attached hereto as Annex C, is incorporated herein by reference. The Award
shall be subject to the terms and conditions of the Plan, and the Participant
hereby assumes and agrees to comply with all of the obligations imposed upon the
Participant in the Plan. This Agreement shall be construed so as to be
consistent with the Plan; and the provisions of the Plan shall be deemed to be
controlling in the event that any provision hereof should appear to be
inconsistent therewith.
12. Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such a manner as to be valid and enforceable under
applicable law, but if any provision of this Agreement is determined to be
unenforceable, invalid or illegal, the validity of any other provision or part
thereof shall not be affected thereby and this Agreement shall continue to be
binding on the parties hereto as if such unenforceable, invalid or illegal
provision or part thereof had not been included herein.
3
<PAGE>
13. Governing Law. Without regard to the principles of conflicts of laws,
-------------
the laws of the State of North Carolina shall govern and control the validity,
interpretation, performance, and enforcement of this Agreement.
14. Modification of Agreement; Waiver. This Agreement may be modified,
---------------------------------
amended, suspended or terminated, and any terms, representations or conditions
may be waived, but only by a written instrument signed by each of the parties
hereto or their successors in interest. No waiver hereunder shall constitute a
waiver with respect to any subsequent occurrence or other transaction hereunder
or of any other provision hereof.
15. Binding Effect. This Agreement shall be binding upon and shall inure
--------------
to the benefit of the parties hereto, and their respective heirs, legatees,
personal representatives, executors, and administrators, successors and assigns.
16. Entire Agreement. This Agreement and the Plan constitute and embody
----------------
the entire understanding and agreement of the parties hereto and, except as
otherwise provided hereunder, there are no other agreements or understandings,
written or oral, in effect between the parties hereto relating to the matters
addressed herein.
17. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when executed and delivered shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the Bank has caused this instrument to be executed in
its corporate name by its President, or one of its Vice Presidents, and attested
by its Secretary or one of its Assistant Secretaries, and its corporate seal to
be hereto affixed, all by, authority of its Board of Directors first duly given;
and each individual party hereto has hereunto set his hand and adopted as his
seal the typewritten word "SEAL" appearing beside his name, all done this the
day and year first above written.
MOORESVILLE SAVINGS BANK, SSB
By:_______________________________________________
__________________ President
ATTEST:
__________________________________
_________________________Secretary
[Corporate Seal]
PARTICIPANT
------------------------------------(SEAL)
4
<PAGE>
ANNEX A
INVESTMENT REPRESENTATION
-------------------------
5
<PAGE>
ANNEX B
MANAGEMENT RECOGNITION PLAN
---------------------------
BENEFICIARY DESIGNATION FORM
----------------------------
As Beneficiary to receive any shares of stock distributable on my behalf
pursuant to the Mooresville Savings Bank, SSB Management Recognition Plan, I
hereby designate the following:
Name Address Relationship
Primary Beneficiary:
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
Contingent Beneficiary:
(if any) --------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
If more than one primary beneficiary is named, shares will be paid in equal
shares to surviving primary beneficiaries. Should the contingent beneficiaries
be eligible to receive the benefits (i.e., all primary beneficiaries are
deceased), such benefits will be paid in equal shares to such surviving
contingent beneficiaries.
Name of Spouse if not given above:
______________________________________________
- --------------------------- --------------------------------------------------
Witness Participant
- --------------------------- --------------------------------------------------
Date
<PAGE>
ANNEX C
MANAGEMENT RECOGNITION PLAN
---------------------------
<PAGE>
APPENDIX A
CODDLE CREEK FINANCIAL CORP.
STOCK OPTION PLAN
THIS IS THE STOCK OPTION PLAN ("Plan") of Coddle Creek Financial Corp. (the
"Corporation"), a North Carolina corporation, with its principal office in
Mooresville, Iredell County, North Carolina, adopted by the Board of Directors
of the Corporation and effective upon the approval of the Plan by the
shareholders of the Corporation, under which options may be granted from time to
time to eligible directors and employees of the Corporation, Mooresville Savings
Bank, Inc., SSB (the "Bank") and of any corporation or other entity of which
either the Corporation or the Bank owns, directly or indirectly, not less than
fifty percent (50%) of any class of equity securities (a "Subsidiary"), to
purchase shares of common stock of the Corporation ("Common Stock"), subject to
the provisions set forth below:
1. PURPOSE OF THE PLAN. The purpose of the Plan is to aid the
-------------------
Corporation, the Bank and any Subsidiary in attracting and retaining capable
directors and employees and to provide a long range incentive for directors,
employees and others to remain in the management and service of the Corporation,
the Bank or any Subsidiary, to perform at increasing levels of effectiveness and
to acquire a permanent stake in the Corporation with the interest and outlook of
an owner. These objectives will be promoted through the granting of options to
acquire shares of Common Stock pursuant to the terms of this Plan.
2. ADMINISTRATION. The Plan shall be administered by a committee (the
--------------
"Committee"), which shall consist of not less than two members of the Board of
Directors of the Corporation (the "Board") who are "Non-Employee Directors" as
defined in Rule 16b-3(b)(3) of the Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Members of the Committee
shall serve at the pleasure of the Board. In the absence at any time of a duly
appointed Committee, this Plan shall be administered by the Board. The Committee
may designate any officers or employees of the Corporation, the Bank or any
Subsidiary to assist in the administration of the Plan and to execute documents
on behalf of the Committee and perform such other ministerial duties as may be
delegated to them by the Committee.
Subject to the provisions of the Plan, the determinations or the
interpretation and construction of any provision of the Plan by the Committee
shall be final and conclusive upon all persons affected thereby. By way of
illustration and not of limitation, the Committee shall have the discretion (a)
to construe and interpret the Plan and all options granted hereunder and to
determine the terms and provisions (and amendments thereof) of the options
granted under the Plan (which need not be identical); (b) to define the terms
used in the Plan and in the options granted hereunder; (c) to prescribe, amend
and rescind the rules and regulations relating to the Plan; (d) to determine the
individuals to whom and the time or times at which such options shall be
granted, the number of shares to be subject to each option, the option price,
and the determination of leaves of absence which may be granted to participants
without constituting a termination of their employment for the purposes of the
Plan; and (e) to make all other determinations necessary or advisable for the
administration of the Plan.
<PAGE>
It shall be in the discretion of the Committee to grant options which
qualify as "incentive stock options," as that term is defined in Section 422 of
the Internal Revenue Code of 1986, as amended ("Incentive Stock Options") or
which do not qualify as Incentive Stock Options ("Nonqualified Stock Options")
(herein referred to collectively as "Options;" however, whenever reference is
specifically made only to "Incentive Stock Options" or "Nonqualified Stock
Options," such reference shall be deemed to be made to the exclusion of the
other). Any options granted which fail to satisfy the requirements for
Incentive Stock Options shall become Nonqualified Stock Options.
3. STOCK AVAILABLE FOR OPTIONS. In the discretion of the Committee, the
---------------------------
stock to be subject to Options under the Plan shall be authorized but unissued
shares of Common Stock which are issued directly to optionees upon exercise of
options and/or shares of Common Stock which are acquired by the Plan or the
Corporation in the open market. The total number of shares of Common Stock for
which Options may be granted under the Plan is 67,447 shares, which is ten
percent (10%) of the total number of shares of Common Stock issued by the
Corporation in connection with the conversion of the Bank from a state-chartered
mutual savings bank to a state-chartered stock savings bank on December 30, 1997
(the "Conversion"). Such number of shares is subject to any capital adjustments
as provided in Section 16. In the event that an Option granted under the Plan
is forfeited, released, expires or is terminated unexercised as to any shares
covered thereby, such shares thereafter shall be available for the granting of
Options under the Plan; however, if the forfeiture, expiration, release or
termination date of an Option is beyond the term of existence of the Plan as
described in Section 21, then any shares covered by forfeited, unexercised,
released or terminated options shall not reactivate the existence of the Plan
and therefore may not be available for additional grants under the Plan. The
Corporation, during the term of the Plan, will reserve and keep available a
number of shares of Common Stock sufficient to satisfy the requirements of the
Plan. In the discretion of the Committee, the shares of Common Stock necessary
to be delivered to satisfy exercised options may be from authorized and unissued
shares of Common Stock or may be purchased in the open market.
4. ELIGIBILITY. Options shall be granted only to individuals who meet
-----------
all of the following eligibility requirements:
(a) Such individual must be an employee or a member of the Board of
Directors of the Corporation, the Bank or a Subsidiary. For this purpose,
an individual shall be considered to be an "employee" only if there exists
between the Corporation, the Bank or a Subsidiary and the individual the
legal and bona fide relationship of employer and employee. In determining
whether such relationship exists, the regulations of the United States
Treasury Department relating to the determination of such relationship for
the purpose of collection of income tax at the source on wages shall be
applied.
(b) Such individual must have such knowledge and experience in
financial and business matters that he is capable of evaluating the merits
and risks of the investment involved in the exercise of the Options.
2
<PAGE>
(c) Such individual, being otherwise eligible under this Section 4,
shall have been selected by the Committee as a person to whom an Option
shall be granted under the Plan.
In determining the directors and employees to whom Options shall be granted
and the number of shares to be covered by each Option, the Committee shall take
into account the nature of the services rendered by respective directors and
employees, their present and potential contributions to the success of the
Corporation, the Bank and any Subsidiary and such other factors as the Committee
shall deem relevant. A director or employee who has been granted an Option
under the Plan may be granted an additional Option or Options under the Plan if
the Committee shall so determine.
If, pursuant to the terms of the Plan, it is necessary that the percentage
of stock ownership of any individual be determined, stock ownership in the
Corporation or of a related corporation which is owned (directly or indirectly)
by or for such individual's brothers and sisters (whether by the whole or half
blood), spouse, ancestors, and lineal descendants or by or for any corporation,
partnership, estate or trust of which such employee is a shareholder, partner or
beneficiary shall be considered as owned by such director or employee.
5. OPTION AGREEMENT Subject to the provisions of this Plan, Options
----------------
shall be awarded to the directors and employees in such amounts as are
determined by the Committee. The proper officers on behalf of the Corporation
and each Optionee shall execute a Stock Option Grant and Agreement (the "Option
Agreement") which shall set forth the total number of shares of Common Stock to
which it pertains, the exercise price, whether it is a Nonqualified Stock Option
or an Incentive Stock Option, and such other terms, conditions, restrictions and
privileges as the Committee in each instance shall deem appropriate, provided
they are not inconsistent with the terms, conditions and provisions of this
Plan. Each Optionee shall receive a copy of his executed Option Agreement. Any
Option granted with the intention that it will be an Incentive Stock Option but
which fails to satisfy a requirement for Incentive Stock Options shall continue
to be valid and shall be treated as a Nonqualified Stock Option.
6. OPTION PRICE.
------------
(a) The option price of each Option granted under the Plan shall be
not less than one hundred percent (100%) of the market value of the stock
on the date of grant of the Option. In the case of incentive stock options
granted to a shareholder who owns stock possessing more than 10 percent
(10%) of the total combined voting power of all classes of stock of the
Corporation, the Bank or a Subsidiary (a "ten percent shareholder"), the
option price of each Option granted under the Plan shall not be less than
one hundred and ten percent (110%) of the market value of the stock on the
date of grant of the Option. If the Common Stock is listed on a national
securities exchange (including for this purpose the Nasdaq Stock Market,
Inc. National Market) on the date in question, then the market value per
share shall be not less than the average of the highest and lowest selling
price on such exchange on such date, or if there were no sales on such
date, then the market price per share shall be equal to the average between
the bid and asked price on such date. If the Common Stock is traded
otherwise than on a national securities exchange (including for this
purpose the Nasdaq Stock Market, Inc.
3
<PAGE>
National Market) on the date in question, then the market price per share
shall be equal to the average between the bid and asked price on such date,
or, if there is no bid and asked price on such date, then on the next prior
business day on which there was a bid and asked price. If no such bid and
asked price is available, then the market value per share shall be its fair
market value as determined by the Committee, in its sole and absolute
discretion. The Committee shall maintain a written record of its method of
determining such value.
(b) The option price shall be payable to the Corporation either (i) in
cash or by check, bank draft or money order payable to the order of the
Corporation, or (ii) at the discretion of the Committee, through the
delivery of shares of the common stock of the Corporation owned by the
optionee with a market value (determined in a manner consistent with (a)
above) equal to the option price, or (iii) at the discretion of the
Committee by a combination of (i) and (ii) above. No shares shall be
delivered until full payment has been made.
7. EXPIRATION OF OPTIONS. The Committee shall determine the expiration
---------------------
date or dates of each Option, but such expiration date shall be not later than
ten (10) years after the date such Option is granted. In the event an Incentive
Stock Option is granted to a ten percent shareholder, the expiration date or
dates of each Option shall be not later than five (5) years after the date such
Option is granted. The Committee, in its discretion, may extend the expiration
date or dates of an Option after such date was originally set; however, such
expiration date may not exceed the maximum expiration date described in this
Section 7.
8. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------
(a) All Options must be granted within ten (10) years of the Effective
Date of this Plan as defined in Section 20.
(b) The Committee may grant Options which are intended to be Incentive
Stock Options and Nonqualified Stock Options, either separately or jointly,
to an eligible employee.
(c) The grant of Options shall be evidenced by an Option Agreement
containing terms and conditions established by the Committee consistent
with the provisions of this Plan.
(d) Not less than 100 shares may be purchased at any one time unless
the number purchased is the total number at that time purchasable under the
Plan.
(e) The recipient of an Option shall have no rights as a shareholder
with respect to any shares covered by his Option until payment in full by
him for the shares being purchased. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is
prior to the date such stock is fully paid for, except as provided in
Section 16.
4
<PAGE>
(f) The aggregate fair market value of the stock (determined as of the
time the Option is granted) with respect to which Incentive Stock Options
are exercisable for the first time by any participant during any calendar
year (under all benefit plans of the Corporation, the Bank or any
Subsidiary, if applicable) shall not exceed $100,000; provided, however,
that such $100,000 limit of this subsection (f) shall not apply to the
grant of Nonqualified Stock Options. The Committee may grant Options which
are exercisable in excess of the foregoing limitations, in which case
Options granted which are exercisable in excess of such limitation shall be
Nonqualified Stock Options.
(g) All stock obtained pursuant to an option which qualifies as an
Incentive Stock Option shall be held in escrow for a period which ends on
the later of (i) two (2) years from the date of the granting of the Option
or (ii) one (1) year after the transfer of the stock pursuant to the
exercise of the Option. The stock shall be held by the Corporation or its
designee. The employee who has exercised the Option shall during such
holding period have all rights of a shareholder, including but not limited
to the rights to vote, receive dividends and sell the stock. The sole
purpose of the escrow is to inform the Corporation of a disqualifying
disposition of the stock within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, and it shall be administered solely for
that purpose.
9. EXERCISE OF OPTIONS.
-------------------
(a) Options granted to an optionee shall become vested and exercisable
at the times, at the rate and subject to such limitations as may be set
forth in the Option Agreement executed in connection therewith; provided,
however, that all outstanding and nonforfeited options shall be
exercisable, if not sooner, on the day prior to the expiration date
thereof.
(b) Notwithstanding the foregoing, Options shall become exercisable
with respect to all of the shares subject thereto upon the optionee's
death, retirement or disability within the meaning of Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended, and in the event of a change
in control as set forth in Section 13 of this Plan.
(c) Any right to exercise Options in annual installments shall be
cumulative and any vested installments may be exercised, in whole or in
part, at the election of the optionee. The exercise of any Option must be
evidenced by written notice to the Corporation that the optionee intends to
exercise his Option.
(d) In no event shall an Option be deemed granted by the Corporation
or exercisable by a recipient prior to the mutual execution by the
Corporation and the recipient of an Option Agreement which comports with
the requirements of Section 5 and Section 8(c).
(e) The inability of the Corporation or Bank to obtain approval from
any regulatory body or authority deemed by counsel to be necessary to the
lawful issuance and sale of any shares of Common Stock hereunder shall
relieve the Corporation and the Bank of any liability in respect of the
non-issuance or sale of such shares. As a
5
<PAGE>
condition to the exercise of an option, the Corporation 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 laws.
(f) The Committee shall have the discretionary authority to impose in
the Option Agreements such restrictions on shares of Common Stock as it may
deem appropriate or desirable, including but not limited to the authority
to impose a right of first refusal or to establish repurchase rights or
both of these restrictions.
(g) Notwithstanding anything to the contrary herein, an optionee
receiving the grant of an Option by virtue of his position as a director or
as an employee of the Corporation, the Bank or a Subsidiary (as stated in
the Option Agreement), shall be required to exercise his Options within the
periods set forth in Sections 10, 11 and 12 below.
10. TERMINATION OF EMPLOYMENT - EXCEPT BY DISABILITY, RETIREMENT OR DEATH.
----------------------------------------------------------------------
If any optionee receiving the grant of an Option by virtue of his position as a
director (as stated in the Option Agreement) ceases to be a director of at least
one of the Corporation, the Bank or any Subsidiary for any reason other than
death, retirement (as defined in Section 11) or disability (as defined in
Section 11) or if any optionee receiving the grant of an Option by virtue of his
position as an employee (as stated in the Option Agreement) ceases to be an
employee of at least one of the Corporation, the Bank and any Subsidiary for any
reason other than death, retirement (as defined in Section 11) or disability (as
defined in Section 11), he may, (i) at any time within three (3) months after
his date of termination, but not later than the date of expiration of the
Option, exercise any Option designated in the Option Agreement as an Incentive
Stock Option and (ii) at any time prior to the date of expiration of the Option,
exercise any option designated in the Option Agreement as a Nonqualified Stock
Option. However, in either such event the optionee may exercise any Option only
to the extent it was vested and he was entitled to exercise the Option on the
date of termination. Any Options or portions of Options of terminated optionees
not so exercised shall terminate and be forfeited.
11. TERMINATION OF EMPLOYMENT - DISABILITY OR RETIREMENT. If any optionee
----------------------------------------------------
receiving the grant of an Option by virtue of his position as a director (as
stated in the Option Agreement) ceases to be a director of at least one of the
Corporation, the Bank or any Subsidiary due to his becoming disabled within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, or
if any employee receiving the grant of an Option by virtue of his position as an
employee (as stated in the Option Agreement) ceases to be employed by at least
one of the Corporation, the Bank and any Subsidiary due to his becoming disabled
within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended, all unvested and forfeitable Options of such optionee shall immediately
become vested and nonforfeitable and he may, (i) at any time within twelve (12)
months after his date of termination, but not later than the date of expiration
of the Option, exercise any option designated in the Option Agreement as an
Incentive Stock Option with respect to all shares subject thereto and (ii) at
any time prior to the date of expiration of the Option, exercise any Option
designated in the Option Agreement as a Nonqualified Stock Option with respect
to all
6
<PAGE>
shares subject thereto. Any portions of Options of optionees who are terminated
because they become disabled which are not so exercised shall terminate.
If any optionee receiving the grant of an Option by virtue of his position
as a director (as stated in the Option Agreement) ceases to be a director of at
least one of the Corporation, the Bank or any Subsidiary due to his retirement,
or if any employee receiving the grant of an Option by virtue of his position as
an employee (as stated in the Option Agreement) ceases to be employed by at
least one of the Corporation, the Bank and any Subsidiary due to his retirement,
all unvested and forfeitable Options of such optionee shall immediately become
vested and nonforfeitable and he may, at any time prior to the date of
expiration of the Option, exercise such Option; provided, however, that if the
Option is exercised more than three (3) months after such retirement, the Option
may be treated as a Nonqualified Stock Option. Any portions of Options of
retired directors or employees not so exercised shall terminate. For purposes
of this Plan, the term "retirement," as it relates to any optionee receiving a
grant of an Option as a result of his position as an employee of the
Corporation, the Bank or any Subsidiary, shall mean (i) the termination of the
optionee's employment under conditions which would constitute retirement under
any tax qualified retirement plan maintained by the Corporation, the Bank or a
Subsidiary, or (ii) termination of employment after attaining age 65. The term
"retirement," as it relates to any optionee receiving a grant of an Option as a
result of his position as a director shall mean the cessation of membership on
such board of directors (i) with the approval of such board of directors, at any
time after such optionee reaches age 65, or (ii) at the election of the optionee
at any time after not less than 15 years of service as a member of the such
board of directors, as applicable.
12. TERMINATION OF EMPLOYMENT - DEATH. If an optionee receiving the grant
---------------------------------
of an option by virtue of his position as a director (as stated in the Option
Agreement) dies while a director of the Corporation, the Bank or any Subsidiary
or if any employee receiving the grant of an option by virtue of his position as
an employee (as stated in the Option Agreement) dies while in the employment of
the Corporation, the Bank or a Subsidiary, all unvested and forfeitable Options
of such optionee shall immediately become vested and nonforfeitable and the
person or persons to whom the Option is transferred by will or by the laws of
descent and distribution may exercise the Option at any time until the term of
the Option has expired, with respect to all shares subject thereto, to the same
extent and upon the same terms and conditions the optionee would have been
entitled to do so had he lived. Any Options or portions of options of deceased
directors or employees not so exercised shall terminate.
13. CHANGE IN CONTROL. In the event that an optionee ceases to be an
-----------------
employee or a director of the Corporation, the Bank or a Subsidiary (which
position resulted in his receipt of an option pursuant to this Plan) for any
reason after the occurrence of a "change in control" and prior to the time that
all shares allocated to him would be 100% vested, nonforfeitable and exercisable
in accordance with Sections 9 and 10 above, then, notwithstanding Sections 9
and 10 above, all Options granted to such optionee shall immediately become
fully vested and nonforfeitable. For purposes of this Plan, a "change in
control" shall mean (i) a change in control of a nature that would be required
to be reported by the Corporation in response to Item 1 of the Current Report on
Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of
the Exchange Act; (ii) such time as any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as
7
<PAGE>
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation or Bank representing 25 percent or more of the
combined voting power of the outstanding Common Stock of the Corporation or
outstanding common stock of the Bank, as applicable; or (iii) individuals who
constitute the Board or the Bank's Board on the date hereof (the "Incumbent
Board" and "Incumbent Bank Board," respectively) cease for any reason to
constitute at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election was approved by a vote of
at least three-quarters of the directors comprising the Incumbent Board or
Incumbent Bank Board, as applicable, or whose nomination for election by the
Corporation's or Bank's shareholders was approved by the Corporation's or Bank's
Board of Directors or Nominating Committee, shall be considered as though he
were a member of the Incumbent Board or Incumbent Bank Board, as applicable; or
(iv) either the Corporation or the Bank consolidates or merges with or into
another corporation, association or entity or is otherwise reorganized, where
neither the Corporation nor the Bank, respectively, is the surviving corporation
in such transaction; or (v) all or substantially all of the assets of either the
Corporation or the Bank are sold or otherwise transferred to or are acquired by
any other entity or group.
In the event of such a termination after a change in control, the Optionee
must exercise any Incentive Stock Options within three (3) months after his date
of termination and may exercise any Nonqualified Stock Options at any time prior
to the date of expiration of the Option.
14. STOCK APPRECIATION RIGHTS.
-------------------------
(a) General Terms and Conditions. The Committee may, but shall not be
obligated to, grant rights to optionees to surrender an exercisable Option,
or any portion thereof, in consideration for the payment by the Corporation
of an amount equal to the excess of the market value (determined as set
forth in Section 6 above) of the shares of Common Stock subject to the
Option, or portion thereof, surrendered over the exercise price of the
Option with respect to such shares (any such authorized surrender and
payment being hereinafter referred to as a "Stock Appreciation Right").
Such payment, at the discretion of the Committee, may be made in shares of
Common Stock valued at the then market value thereof (determined as set
forth in Section 6 above), or in cash, or partly in cash and partly in
shares of Common Stock.
The terms and conditions set with respect to a Stock Appreciation
Right may include (without limitation), subject to other provisions of this
Section 14 and this Plan, the period during which, date by which or event
upon which the Stock Appreciation Right may be exercised (which shall be on
the same terms as the Option to which is related); the method for valuing
shares of Common Stock for purposes of this Section 14; a ceiling on the
amount of consideration which the Corporation may pay in connection with
exercise of the Stock Appreciation Right; and arrangements for income tax
withholding. The Committee shall have complete discretion to determine
whether, when and to whom Stock Appreciation Rights may be granted.
(b) Time Limitations. A Stock Appreciation Right may be exercised
only within the period, if any, within which the Option to which it relates
may be exercised. Notwithstanding the foregoing, any election by an
optionee to exercise Stock
8
<PAGE>
Appreciation Rights shall be made during the period beginning on the third
business day following the release for publication of quarterly or annual
financial information required to be prepared and disseminated by the
Corporation pursuant to the requirements of the Exchange Act and ending on
the twelfth business day following such date. The required release of
information shall be deemed to have been satisfied when the specified
financial data appears on or in a wire service, financial news service or
newspaper of general circulation or is otherwise first made publicly
available.
(c) Effects of Exercise of Stock Appreciation Rights or Options. Upon
the exercise of a Stock Appreciation Right, the number of shares of Common
Stock available under the Option to which it relates shall decrease by a
number equal to the number of shares for which the Stock Appreciation Right
was exercised. Upon the exercise of an Option, any related Stock
Appreciation Right shall terminate as to any number of shares of Common
Stock subject to the Stock Appreciation Right that exceeds the total number
of shares for which the Option remains unexercised.
(d) Time of Grant. A Stock Appreciation Right granted in connection
with an Incentive Stock Option must be granted concurrently with the Option
to which is relates, while a Stock Appreciation Right granted in connection
with a Nonqualified Stock Option may be granted concurrently with the
Option to which it relates or at any time thereafter prior to the exercise
or expiration of such Option. No optionee shall have any Stock
Appreciation Rights unless (i) in the case of Incentive Stock Options and
Nonqualified Stock Options, the Stock Option Agreement shall so state or
(ii) in the case of Nonqualified Stock Options, the Committee shall have
executed an amendment to the Stock Option Agreement so stating.
(e) Non-Transferable. A Stock Appreciation Right may not be
transferred or assigned except in connection with a transfer of the Option
to which it relates.
15. RESTRICTIONS ON TRANSFER. An Option granted under this Plan may not
------------------------
be transferred except by will or the laws of descent and distribution and,
during the lifetime of the optionee to whom it was granted, may be exercised
only by such optionee.
16. CAPITAL ADJUSTMENTS AFFECTING COMMON STOCK.
------------------------------------------
(a) If the outstanding shares of Common Stock of the Corporation are
increased, decreased, changed into or exchanged for a different number or
kind of shares or other securities of the Corporation or another entity as
a result of a recapitalization, reclassification, stock dividend, stock
split, amendment to the Corporation's Certificate of Incorporation, reverse
stock split, merger or consolidation, an appropriate adjustment shall be
made in the number and/or kind of securities allocated to the Options and
Stock Appreciation Rights previously and subsequently granted under the
Plan, without change in the aggregate purchase price applicable to the
unexercised portion of the outstanding Options but with a corresponding
adjustment in the price for each share or other unit of any security
covered by the Options.
9
<PAGE>
(b) In the event that the Corporation shall declare and pay any
dividend with respect to the Common Stock (other than a dividend payable in
shares of the Corporation's Common Stock or a regular cash dividend),
including a dividend which results in a nontaxable return of capital to the
holders of shares of Common Stock for federal income tax purposes, or
otherwise than by dividend makes distribution of property to the holders of
its shares of Common Stock, the Committee, in its discretion applied
uniformly to all outstanding Options, may adjust the exercise price per
share of outstanding Options in such a manner as the Committee may
determine to be necessary to reflect the effect of the dividend or other
distribution on the fair market value of a share of Common Stock.
(c) To the extent that the foregoing adjustments described in Sections
16(a) and (b) above relate to particular Options or to particular stock or
securities of the Corporation subject to Option under this Plan, such
adjustments shall be made by the Committee, whose determination in that
respect shall be final and conclusive.
(d) The grant of an Option or Stock Appreciation Right pursuant to
this Plan shall not affect in any way the right or power of the Corporation
to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or assets.
(e) No fractional shares of stock shall be issued under the Plan for
any such adjustment.
(f) Any adjustment made pursuant to this Section 16, shall be made, to
the extent practicable, in such manner as not to constitute a modification
of any outstanding Incentive Stock Options within the meaning of Section
424(h) of the Internal Revenue Code of 1986, as amended.
17. INVESTMENT PURPOSE. At the discretion of the Committee, any Option
------------------
Agreement may provide that the optionee shall, by accepting the Option,
represent and agree, for himself and his transferees by will or the laws of
descent and distribution, that all shares of stock purchased upon the exercise
of the Option will be acquired for investment and not for resale or
distribution, and that upon each exercise of any portion of an Option, the
person entitled to exercise the same shall furnish evidence of such facts which
is satisfactory to the Corporation. Certificates for shares of stock acquired
under the Plan may be issued bearing such restrictive legends as the Corporation
and its counsel may deem necessary to ensure that the optionee is not an
"underwriter" within the meaning of the regulations of the Securities and
Exchange Commission.
18. APPLICATION OF FUNDS. The proceeds received by the Corporation from
--------------------
the sale of Common Stock pursuant to Options will be used for general corporate
purposes.
19. NO OBLIGATION TO EXERCISE. The granting of an Option or Stock
-------------------------
Appreciation Right shall impose no obligation upon the optionee to exercise such
Option or Stock Appreciation Right.
10
<PAGE>
20. EFFECTIVE DATE OF PLAN. The Plan will become effective upon the
----------------------
approval of the Plan by the shareholders of the Corporation and receipt of any
necessary regulatory approvals.
21. TERM OF PLAN. Options and Stock Appreciation Rights may be granted
------------
pursuant to this Plan from time to time within ten (10) years from the effective
date of the Plan.
22. TIME OF GRANTING OF OPTIONS. Nothing contained in the Plan or in any
---------------------------
resolution adopted or to be adopted by the Committee or the shareholders of the
Corporation and no action taken by the Committee shall constitute the granting
of any Option or Stock Appreciation Right hereunder. The granting of an Option
and Stock Appreciation Right pursuant to the Plan shall take place only when an
Option Agreement shall have been duly executed and delivered by and on behalf of
the Corporation at the direction of the Committee.
23. CASH PAYMENTS. At the time of the payment of any dividend or other
-------------
distribution with respect to the Common Stock, in the absolute discretion of,
and upon direction of the Board, the Corporation shall cause to be paid to
existing directors and employees of the Corporation, the Bank or any Subsidiary
who hold nonforfeited, unexercised Options under this Plan, regardless of
whether or not such Options are vested and nonforfeitable, a cash amount equal
to the number of shares of Common Stock subject to nonforfeited, unexercised
options held by such optionee multiplied by the amount of any dividends or other
distributions paid per share of Common Stock outstanding. The Board shall have
the discretion to approve cash payments at the time of some dividends or
distributions but not others. Notwithstanding the foregoing, no amounts shall
be paid to optionees pursuant to this Section 23 with respect to any dividend or
distribution if at the time of such dividend or distribution, the exercise price
of the Options shall have been reduced pursuant to Section 16(b) above.
If any director or employee of the Corporation, the Board or any Subsidiary
shall receive any cash payment from the Company, the Board or any Subsidiary
pursuant to this Section 23 with respect to an Option which is not vested and
exercisable, and if such Option shall be forfeited, then within 30 days after
the effective date of such forfeiture, the optionee shall pay to the
Corporation, the Bank or the Subsidiary (as applicable) an amount equal to the
cash payment received by such optionee with respect to such forfeited Option.
In the alternative, at the option of the Corporation, the Bank or the Subsidiary
(as applicable) the amount to be repaid may be withheld from the final
compensation payable to the optionee.
24. WITHHOLDING TAXES. Whenever the Corporation proposes or is required
-----------------
to cause to be issued or transferred shares of stock, cash or other assets
pursuant to this Plan, the Corporation shall have the right to require the
optionee to remit to the Corporation an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the issuance
of any certificate or certificates for such shares or delivery of such cash or
other assets. Alternatively, the Corporation may issue or transfer such shares
of stock or make other distributions of cash or other assets net of the number
of shares or other amounts sufficient to satisfy the withholding tax
requirements. For withholding tax purposes, the shares of stock, cash and other
assets to be distributed shall be valued on the date the withholding obligation
is incurred.
11
<PAGE>
25. TERMINATION AND AMENDMENT. The Board may at any time alter, suspend,
-------------------------
terminate or discontinue the Plan, subject to any applicable regulatory
requirements and any required stockholder approval or any stockholder approval
which the Board may deem advisable for any reason, such as for the purpose of
obtaining or retaining any statutory or regulatory benefits under tax,
securities or other laws or satisfying applicable stock exchange or quotation
system listing requirements. The Board may not, without the consent of the
holder of an Option or Stock Appreciation Right previously granted, make any
alteration which would deprive the optionee of his rights with respect thereto.
26. CAPTIONS AND HEADINGS; GENDER AND NUMBER. Captions and paragraph
----------------------------------------
headings used herein are for convenience only, do not modify or affect the
meaning of any provision herein, are not a part, and shall not serve as a basis
for interpretation or construction of, this Plan. As used herein, the masculine
gender shall include the feminine and neuter, and the singular number shall
include the plural, and vice versa, whenever such meanings are appropriate.
27. COST OF PLAN; EXCULPATION AND INDEMNIFICATION. All costs and expenses
---------------------------------------------
incurred in the operation and administration of the Plan shall be borne by the
Corporation, the Bank and the Subsidiaries. In connection with this Plan, no
member of the Board, no member of the Bank's Board, no member of the Board of
Directors of any Subsidiary, and no member of the Committee shall be personally
liable for any act or omission to act, nor for any mistake in judgment made in
good faith, unless arising out of, or resulting from, such person's own bad
faith, willful misconduct or criminal acts. To the extent permitted by
applicable law and regulation, the Corporation shall indemnify, defend and hold
harmless the members of the Board, the members of the Board of Directors of the
Bank and the members of the Board of Directors of any Subsidiary, and members of
the Committee, and each other officer or employee of the Bank, the Corporation
or of any Subsidiary to whom any power or duty relating to the administration or
interpretation of this Plan may be assigned or delegated, from and against any
and all liabilities (including any amount paid in settlement of a claim with the
approval of the Board), and any costs or expenses (including counsel fees)
incurred by such persons arising out of or as a result of, any act or omission
to act, in connection with the performance of such person's duties,
responsibilities and obligations under this Plan, other than such liabilities,
costs, and expenses as may arise out of, or result from the bad faith, willful
misconduct or criminal acts of such persons.
28. GOVERNING LAW. Without regard to the principles of conflicts of laws,
-------------
the laws of the State of North Carolina shall govern and control the validity,
interpretation, performance, and enforcement of this Plan.
29. INSPECTION OF PLAN. A copy of this Plan, and any amendments thereto,
------------------
shall be maintained by the Secretary of the Corporation and shall be shown to
any proper person making inquiry about it.
30. OTHER PROVISIONS. The Option Agreements authorized under this
----------------
Plan shall contain such other provisions not inconsistent with the foregoing,
including, without limitation, increased restrictions upon the exercise of
options, as the Committee may deem advisable.
12
<PAGE>
EXHIBIT A
---------
STOCK OPTION GRANT AND AGREEMENT
THIS STOCK OPTION GRANT AND AGREEMENT (this "Agreement"), being made
according to and subject to the terms and conditions of the CODDLE CREEK
FINANCIAL CORP. STOCK OPTION PLAN (the "Plan"), a copy of which is attached to
this Agreement as Annex A and is incorporated by reference into and made a part
of this Agreement, is executed and effective the _______ day of _______________,
_____, between Coddle Creek Financial Corp. (the "Corporation") and
____________________ (the "Optionee"):
1. GRANT. As of the above date, the Corporation hereby grants to the
-----
Optionee (applicable provisions are marked):
[_] an Incentive Stock Option [as that term is defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code")] to purchase
________ shares of Common Stock of the Corporation at the price stated
in this Agreement;
[_] a Nonqualified Stock Option to purchase __________ shares of Common
Stock of the Corporation at the price stated in this Agreement.
The Optionee [_] shall [_] shall not have Stock Appreciation Rights in
connection with the Options granted hereby, in accordance with Section
14 of the Plan.
The Option(s) and any Stock Appreciation Rights granted under this
section and as described in this Agreement is (are) in all respects
subject to and conditioned by the terms, definitions, and provisions of
this Agreement and of the Plan. Capitalized terms in this Agreement
which are not otherwise defined but which are defined in the Plan shall
have the same meaning given to those terms in the Plan.
The Optionee has been granted Options under the Plan as a result of the
Optionee's position as a [_] director [_] employee of the Corporation,
the Bank or a Subsidiary.
2. PRICE. The Option price is $_____________ for each share.
-----
3. EXERCISE OF OPTION. The Option(s) granted under this Agreement shall be
------------------
exercisable pursuant to the terms and conditions of the Plan and as set
forth below:
1
<PAGE>
(a) Right to Exercise: In addition to the terms and conditions
-----------------
imposed on the Optionee's right to exercise his Options and any Stock
Appreciation Rights imposed in the Plan, the following terms and
conditions are applicable:
---------------------------------------------------------------------
---------------------------------------------------------------------
(b) [_] (Marked if applicable) Annual Installments: Subject to the
-------------------
terms and conditions of the Plan, the Incentive Stock Options can be
exercised in annual installments as follows:
__________________ shares beginning on ______________, 1999
__________________ shares beginning on ______________, 2000
__________________ shares beginning on ______________, 2001
__________________ shares beginning on ______________, 2002
Subject to the terms and conditions of the Plan, the Nonqualified
Options can be exercised in annual installments as follows:
__________________ shares beginning on ______________, 1999
__________________ shares beginning on ______________, 2000
__________________ shares beginning on ______________, 2001
__________________ shares beginning on ______________, 2002
The right to exercise the Option(s) in annual installments shall be
cumulative. In addition, the option(s) shall be exercisable upon
disability, death, retirement and a change in control as set forth in
the Plan.
(c) Method of Exercise: The Options and any Stock Appreciation Rights
------------------
granted under this Agreement shall be exercisable by a written notice
to the Secretary of the Corporation which shall:
(1) State the election to exercise the Option or the election to
surrender an exercisable Option and exercise Stock Appreciation
Rights, the number of shares in respect of which the Option or
Stock Appreciation Right is being exercised, the person in whose
name any stock certificate or certificates for such shares of
Common Stock is to be registered or to whom any cash is to be
paid, his address, and social security number;
(2) Contain any such representation and agreements as to
Optionee's investment intent with respect to shares of Common
Stock as may be required by the Committee;
(3) Be signed by the person entitled to exercise the Option and,
if the Option is being exercised by any person or persons
2
<PAGE>
other than the Optionee, be accompanied by proof, satisfactory to
the Corporation, of the right of such person or persons to
exercise the Option or Stock Appreciation Rights in accordance
with the Plan; and
(4) Be accompanied by payment of the purchase price of any shares
with respect to which the Option is being exercised which payment
shall be in form acceptable to the Committee pursuant to Section
6(b) of the Plan.
(d) Representations and Warranties: In order to exercise an Option or
------------------------------
Stock Appreciation Right, the person exercising the Option or Stock
Appreciation Right must make the representations and warranties to the
Corporation as may be required by any applicable law or regulation, or
as may otherwise be required pursuant to the Plan.
(e) Approvals. In order for an Option or Stock Appreciation Right to
---------
be exercised, all filings and approvals required by applicable law and
regulations or pursuant to the Plan must have been made and obtained.
4. NON-TRANSFERABILITY. Neither any Option nor any Stock Appreciation
-------------------
Rights may be transferred in any manner otherwise than by will or the laws of
descent and distribution and such Option and any Stock Appreciation Rights may
be exercised during the life of the Optionee only by him.
5. INVESTMENT PURPOSE. This Option and any Stock Appreciation Rights
------------------
may not be exercised if the issuance of shares or payment of cash upon such
exercise would constitute a violation of any applicable federal or state
securities law or other law or valid regulation.
6. EXPIRATION. This Option and any corresponding Stock Appreciation
----------
Rights shall expire on _____________, 2009.
7. ESCROW. All stock purchased pursuant to an Incentive Stock Option
------
shall be held in escrow for a period which ends on the later of (i) two (2)
years from the date of the granting of the option or (ii) one (1) year after the
transfer of the stock pursuant to the exercise of the Option. The stock shall
be held by the Corporation or its designee. The Optionee who has exercised the
Option shall have all rights of a stockholder, including, but not limited to,
the rights to vote, receive dividends and sell the stock. The sole purpose of
the escrow is to inform the Corporation of a disqualifying disposition of the
stock within the meaning of Section 422 of the Code, and it shall be
administered solely for this purpose.
8. REPAYMENT OF CASH PAYMENTS. If the Optionee hereunder forfeits any
--------------------------
Options pursuant to the Plan, the Optionee shall, within 30 days after the
effective date of such forfeiture, pay the Corporation, the Bank or a Subsidiary
(as applicable) an amount equal to the cash payments received by the Optionee
from the Corporation, the Bank or any Subsidiary with respect to such forfeited
Options pursuant to Section 23 of the Plan. In the alternative, at the option
of the Corporation, the Bank or a Subsidiary, the amount to be repaid may be
withheld by
3
<PAGE>
the Corporation, the Bank or a Subsidiary from the final compensation or fees
payable to the Optionee. Each acceptance by an Optionee of cash payments
pursuant to such Section 23 with respect to Options still subject to forfeiture
shall constitute a reaffirmation of the agreements set forth in this paragraph
8.
9. TAX WITHHOLDING. All stock, cash and other assets distributed
---------------
pursuant to this Agreement shall be subject to applicable federal, state and
local withholding for taxes. The Optionee expressly acknowledges and agrees to
such withholding. The Optionee acknowledges and agrees to the tax withholding
provisions which are set forth in the Plan.
10. RESOLUTION OF DISPUTES. Any dispute or disagreement which should
----------------------
arise under, or as a result of, or in any way relate to, the interpretation,
construction, or application of this Agreement or the Plan will be determined by
the Committee designated in Section 2 of the Plan. Any determination made by
such Committee shall be final, binding, and conclusive for all purposes.
11. CONSTRUCTION CONTROLLED BY PLAN. The Options and any corresponding
-------------------------------
Stock Appreciation Rights evidenced hereby shall be subject to all of the
requirements, conditions and provisions of the Plan. This Agreement shall be
construed so as to be consistent with the Plan; and the provisions of the Plan
shall be deemed to be controlling in the event that any provision should appear
to be inconsistent therewith.
12. SEVERABILITY. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such a manner as to be valid and enforceable under
applicable law, but if any provision of this Agreement is determined to be
unenforceable, invalid or illegal, the validity of any other provision or part
thereof shall not be affected thereby and this Agreement shall continue to be
binding on the parties hereto as if such unenforceable, invalid or illegal
provision or part thereof had not been included herein.
13. MODIFICATION OF AGREEMENT; WAIVER. This Agreement may be modified,
---------------------------------
amended, suspended or terminated, and any terms, representations or conditions
may be waived, but only by a written instrument signed by each of the parties
hereto and only subject to the limitations set forth in the Plan. No waiver
hereunder shall constitute a waiver with respect to any subsequent occurrence or
other transaction hereunder or of any other provision.
14. CAPTIONS AND HEADINGS; GENDER AND NUMBER. Captions and paragraph
----------------------------------------
headings used herein are for convenience only, do not modify or affect the
meaning of any provision herein, are not a part, and shall not serve as a basis
for interpretation or construction, of this Agreement. As used herein, the
masculine gender shall include the feminine and neuter, and the singular number
shall include the plural, and vice versa, whenever such meanings are
appropriate.
15. GOVERNING LAW; VENUE AND JURISDICTION. Without regard to the
-------------------------------------
principles of conflicts of laws, the laws of the State of North Carolina shall
govern and control the validity, interpretation, performance, and enforcement of
this Agreement.
4
<PAGE>
16. BINDING EFFECT. This Agreement shall be binding upon and shall inure
--------------
to the benefit of the Corporation, and its successors and assigns, and shall be
binding upon and inure to the benefit of the Optionee, and his heirs, legatees,
personal representative, executor, administrator and permitted assigns.
17. ENTIRE AGREEMENT. This Agreement and the Plan constitute and embody
----------------
the entire understanding and agreement of the parties hereto and, except as
otherwise provided hereunder, there are no other agreements or understandings,
written or oral, in effect between the parties hereto relating to the matters
addressed herein.
18. COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which when executed and delivered shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have set their hands and seals the day and
year first above written.
CODDLE CREEK FINANCIAL CORP.
ATTEST:
By:_____________________ By:_______________________________________
(Corporate Seal) _________________President
OPTIONEE:
__________________________________________
(SEAL)
5
<PAGE>
REVOCABLE PROXY
CODDLE CREEK FINANCIAL CORP.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
SPECIAL MEETING OF STOCKHOLDERS
JANUARY 26, 1999
11:00 A.M.
The undersigned hereby appoints the official proxy committee consisting of all
the members of the Board of Directors of Coddle Creek Financial Corp. (the
"Company"), each with full power of substitution, to act as attorneys and
proxies for the undersigned, and to vote all shares of Common Stock of the
Company which the undersigned is entitled to vote only at the Special Meeting of
Stockholders, to be held at the office of the Company, 347 North Main Street,
Mooresville, North Carolina, on January 26, 1999, at 11:00 a.m. and at any and
all adjournments thereof, as follows:
Please be sure to --------------------------------------------------------
sign and date Date
this Proxy in the box
below.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Stockholder sign above Co-Holder (if any) sign above
1. The approval of the Coddle Creek Financial Corp. Stock Option Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. The approval of the Mooresville Savings Bank, Inc., SSB Management
Recognition Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE ANNUAL MEETING: [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
If no instructions are given, the proxy will be voted for Proposals 1 and 2. If
---
instructions are given with respect to one but not both proposals, such
instructions as are given will be followed and the proxy will be voted for the
---
proposal on which no instructions are given.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
CODDLE CREEK FINANCIAL CORP.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The above signed acknowledges receipt from the Company, prior to the execution
of this Proxy, of a Notice of Special Meeting and a Proxy Statement dated
December 29, 1998.
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder may sign, but only one signature is
required.
PLEASE ACT PROMPTLY
SIGN, DATE AND MAIL YOUR PROXY CARD TODAY
