Registration No. 33-63351
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 ON
FORM S-8
TO REGISTRATION STATEMENT ON FORM S-4
UNDER THE SECURITIES ACT OF 1933
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NATIONSBANK CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
NORTH CAROLINA 56-0906609
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
NATIONSBANK CORPORATE CENTER
100 NORTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28255
(Address of Principal Executive Offices)
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BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN (1982)
SOUTHERN BANCORP, INC. 1986 INCENTIVE STOCK OPTION PLAN AND 1986 NONSTATUTORY
STOCK OPTION PLAN
HERITAGE BANCSHARES, INC. EMPLOYEES' NON-QUALIFIED STOCK OPTION PLAN
BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN (1992)
BANK SOUTH CORPORATION 1993 EQUITY INCENTIVE PLAN
1988 SUBSTITUTE STOCK OPTION PLAN OF CHATTAHOOCHEE BANCORP, INC. FOR THE
1987 STOCK OPTION PLAN OF THE BUCKHEAD BANK
1988 SUBSTITUTE STOCK OPTION PLAN OF CHATTAHOOCHEE BANCORP, INC. FOR THE
1987 STOCK OPTION PLAN OF THE CHATTAHOOCHEE FINANCIAL CORPORATION
THE MERCHANT BANK OF ATLANTA INCENTIVE STOCK OPTION PLAN
BANK SOUTH CORPORATION 1994 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
GWINNETT BANCSHARES, INC. STOCK OPTION PLAN
(Full title of the Plans)
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PAUL J. POLKING
GENERAL COUNSEL
NATIONSBANK CORPORATION
NATIONSBANK CORPORATE CENTER
100 NORTH TRYON STREET
CHARLOTTE, NORTH CAROLINA 28255
(Name and Address of Agent For Service)
(704) 386-5000
(Telephone Number, Including Area Code, of Agent For Service)
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Copy To:
R. DOUGLAS HARMON
SMITH HELMS MULLISS & MOORE, L.L.P.
POST OFFICE BOX 31247
CHARLOTTE, NORTH CAROLINA 28231
(704) 343-2000
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This Post-Effective Amendment No. 1 covers shares of the Registrant's
Common Stock originally registered on the Registration Statement on Form S-4 to
which this is an amendment. The registration fees in respect of such Common
Stock were paid at the time of the original filing of the Registration Statement
on Form S-4 relating thereto.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents constituting a Prospectus (a "Prospectus") with respect to
this PostEffective Amendment No. 1 on Form S-8 to the Registration Statement on
Form S-4 of NationsBank Corporation (the "Registrant") are kept on file at the
offices of the Registrant in accordance with Rule 428 promulgated pursuant to
the Securities Act of 1933, as amended (the "Securities Act"). The Registrant
will provide without charge to participants in the Plans referenced herein, on
the written or oral request of any such person, a copy of any or all of the
documents constituting a Prospectus. Written requests for such copies should be
directed to Charles J. Cooley, Principal Corporate Personnel Officer,
NationsBank Corporation, NationsBank Corporate Center, 100 North Tryon Street,
Charlotte, North Carolina 28255. Telephone requests may be directed to
(704) 386-5000.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been heretofore filed by the
Registrant with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are incorporated by reference herein:
(a) The Registrant's Annual Report on Form 10-K for the year ended December
31, 1994;
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995, June 30, 1995 and September 30, 1995 and Current Reports on Form
8-K filed January 26, 1995, February 21, 1995, March 2, 1995 (two reports on
this date), March 21, 1995 (amended by Form 8-K/A Amendment No. 1 filed March
21, 1995), March 27, 1995, April 24, 1995, April 25, 1995, May 16, 1995, July
10, 1995, July 24, 1995, August 31, 1995, September 20, 1995, October 20, 1995
(two reports on this date), November 9, 1995, and December 15, 1995; and
(c) The description of the Registrant's Common Stock contained in its
registration statement filed pursuant to Section 12 of the Exchange Act, and any
amendment or report filed for the purpose of updating such description.
All documents filed by the Registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the
effectiveness of this Registration Statement and prior to the filing of a
post-effective amendment hereto that either indicates that all securities
offered hereto have been sold or deregisters all securities then remaining
unsold
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shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein or therein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
The Registrant will provide without charge to each person to whom a
Prospectus constituting a part of this Registration Statement is delivered, on
the written or oral request of any such person, a copy of any or all of the
documents incorporated herein and in the Prospectus by reference (other than
exhibits to such documents which are not specifically incorporated by reference
in such documents). Written requests for such copies should be directed to
Charles J. Cooley, Principal Corporate Personnel Officer, NationsBank
Corporation, NationsBank Corporate Center, 100 North Tryon Street, Charlotte,
North Carolina 28255. Telephone requests may be directed to (704) 386-5000.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Registrant's Common Stock to be issued in connection
with the Plans has been passed upon by Smith Helms Mulliss & Moore, L.L.P.,
Charlotte, North Carolina. As of the date of this Post-Effective Amendment No. 1
on Form S-8, certain attorneys of Smith Helms Mulliss & Moore, L.L.P.,
beneficially owned an aggregate of approximately 50,000 shares of the
Registrant's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
There are no provisions in the Registrant's Restated
Articles of Incorporation, and no contracts between the Registrant
and its directors and officers, relating to indemnification. The
Registrant's Restated Articles of Incorporation prevent the
recovery by the Registrant of monetary damages against its directors.
However, in accordance with the provisions of the North Carolina
Business Corporation Act (the "Act"), the Registrant's Amended and
Restated Bylaws provide that, in addition to the indemnification of
directors and officers otherwise provided by the Act, the Registrant
shall, under certain circumstances, indemnify its directors,
executive officers and certain other designated officers against any
and all liability and litigation expense, including reasonable
attorneys' fees, arising out of their status or activities as
directors and officers, except for liability or litigation expense
incurred on account of activities that were at the time known or
reasonably should have been known by such director or officer to be
clearly in conflict with the best interests of the Registrant. Pursuant
to such Bylaws and as authorized by statute, the Registrant maintains
insurance on behalf of its directors and officers against liability
asserted against such persons in such capacity whether or not such
directors or officers have the right to indemnification pursuant to
the Bylaws or otherwise.
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In addition to the above-described provisions, Sections 55-8-50 through
55-8-58 of the Act contain provisions prescribing the extent to which directors
and officers shall or may be indemnified. Section 55-8-51 of the Act permits a
corporation, with certain exceptions, to indemnify a current or former director
against liability if (i) he conducted himself in good faith, (ii) he reasonably
believed (x) that his conduct in his official capacity with the corporation was
in its best interests and (y) in all other cases his conduct was at least not
opposed to the corporation's best interests, and (iii) in the case of any
criminal proceeding, he had no reasonable cause to believe his conduct was
unlawful. A corporation may not indemnify a current or former director in
connection with a proceeding by or in the right of the corporation in which the
director was adjudged liable to the corporation or in connection with a
proceeding charging improper personal benefit to him in which he was adjudged
liable on such basis. The above standard of conduct is determined by the Board
of Directors or a committee thereof, special legal counsel or the shareholders
as prescribed in Section 55-8-55 of the Act.
Sections 55-8-52 and 55-8-56 of the Act require a corporation to
indemnify a director or officer in the defense of any proceeding to which he was
a party because of his capacity as a director or officer against reasonable
expenses when he is wholly successful in his defense, unless the articles of
incorporation provide otherwise. Upon application, the court may order
indemnification of the director or officer if he is adjudged fairly and
reasonably so entitled under Section 55-8-54. Section 55-8-56 allows a
corporation to indemnify and advance to an officer, employee or agent who is not
a director to the same extent as a director or as otherwise set forth in the
corporation's articles of incorporation or bylaws or by a resolution of the
board of directors.
In addition, Section 55-8-57 permits a corporation to provide for
indemnification of directors, officers, employees or agents, in its articles of
incorporation or bylaws or by contract or resolution, against liability in
various proceedings and to purchase and maintain insurance policies on behalf of
these individuals.
THE FOREGOING IS ONLY A GENERAL SUMMARY OF CERTAIN ASPECTS OF NORTH
CAROLINA LAW DEALING WITH INDEMNIFICATION OF DIRECTORS AND OFFICERS AND DOES NOT
PURPORT TO BE COMPLETE. IT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
RELEVANT STATUTES CONTAINING DETAILED SPECIFIC PROVISIONS REGARDING THE
CIRCUMSTANCES UNDER WHICH AND THE PERSON FOR WHOSE BENEFIT INDEMNIFICATION SHALL
OR MAY BE MADE AND ACCORDINGLY ARE INCORPORATED HEREIN BY REFERENCE.
ITEM 8. EXHIBITS.
The following exhibits are filed with or incorporated by reference in
this Registration Statement.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
5.1 Opinion of Smith Helms Mulliss & Moore, L.L.P. as to
the legality of the securities.*
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23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Smith Helms Mulliss & Moore, L.L.P. (included in Exhibit
5.1).*
24.1 Power of Attorney and Certified Resolutions.*
99.1 Bank South Corporation Key Employee Stock Option Plan (1982).
99.2 Southern Bancorp, Inc. 1986 Incentive Stock Option Plan and 1986
Nonstatutory Stock Option Plan.
99.3 Material Provisions of the Heritage Bancshares, Inc. Employees'
Non-Qualified Stock Option Plan.
99.4 Bank South Corporation Key Employee Stock Option Plan (1992).
99.5 Bank South Corporation 1993 Equity Incentive Plan.
99.6 1988 Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the
1987 Stock Option Plan of The Buckhead Bank.
99.7 1988 Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the
1987 Stock Option Plan of The Chattahoochee Financial Corporation.
99.8 The Merchant Bank of Atlanta Incentive Stock Option Plan.
99.9 Bank South Corporation 1994 Stock Option Plan for Outside Directors.
99.10 Gwinnett Bancshares, Inc. Stock Option Plan.
99.11 Provisions of North Carolina law relating to
indemnification of directors and officers
(incorporated herein by reference to Exhibit 99.1 of
the NationsBank Corporation Registration Statement on
Form S-3 (Registration No. 33-63097) filed on
September 29, 1995.)
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* Previously filed as an exhibit to the Registrant's Registration Statement
on Form S-4 to which this is Post-Effective Amendment No. 1.
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ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement
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relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE
offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this
Post-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Charlotte,
State of North Carolina, on January 10, 1996.
NATIONSBANK CORPORATION
By: HUGH L. McCOLL, JR.*
Hugh L. McColl, Jr.
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
HUGH L. McCOLL, JR. * Chairman of the Board, Chief January 10, 1996
- --------------------------------------------
Hugh L. McColl, Jr. Executive Officer and Director
(Principal Executive Officer)
JAMES H. HANCE, JR. * Vice Chairman and January 10, 1996
- --------------------------------------------
James H. Hance, Jr. Chief Financial Officer
(Principal Financial Officer)
MARC D. OKEN * Executive Vice President and January 10, 1996
- --------------------------------------------
Marc D. Oken Chief Accounting Officer
(Principal Accounting Officer)
RONALD W. ALLEN * Director January 10, 1996
- --------------------------------------------
Ronald W. Allen
</TABLE>
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WILLIAM M. BARNHARDT * Director January 10, 1996
- --------------------------------------------
William M. Barnhardt
THOMAS E. CAPPS * Director January 10, 1996
- --------------------------------------------
Thomas E. Capps
CHARLES W. COKER * Director January 10, 1996
- --------------------------------------------
Charles W. Coker
THOMAS G. COUSINS * Director January 10, 1996
- --------------------------------------------
Thomas G. Cousins
ALAN T. DICKSON * Director January 10, 1996
- --------------------------------------------
Alan T. Dickson
W. FRANK DOWD, JR. * Director January 10, 1996
- --------------------------------------------
W. Frank Dowd, Jr.
PAUL FULTON * Director January 10, 1996
- --------------------------------------------
Paul Fulton
L. L. GELLERSTEDT, JR. * Director January 10, 1996
- --------------------------------------------
L. L. Gellerstedt, Jr.
TIMOTHY L. GUZZLE * Director January 10, 1996
- --------------------------------------------
Timothy L. Guzzle
W. W. JOHNSON * Director January 10, 1996
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W. W. Johnson
BUCK MICKEL * Director January 10, 1996
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Buck Mickel
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JOHN J. MURPHY * Director January 10, 1996
- --------------------------------------------
John J. Murphy
JOHN C. SLANE * Director January 10, 1996
- --------------------------------------------
John C. Slane
JOHN W. SNOW * Director January 10, 1996
- --------------------------------------------
John W. Snow
MEREDITH R. SPANGLER * Director January 10, 1996
- --------------------------------------------
Meredith R. Spangler
ROBERT H. SPILMAN * Director January 10, 1996
- --------------------------------------------
Robert H. Spilman
- -------------------------------------------- Director January __, 1996
Ronald Townsend
- -------------------------------------------- Director January __, 1996
E. Craig Wall, Jr.
JACKIE M. WARD * Director January 10, 1996
- --------------------------------------------
Jackie M. Ward
*By:/s/ CHARLES M. BERGER
Charles M. Berger
Attorney-in-Fact
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INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
5.1 Opinion of Smith Helms Mulliss & Moore, L.L.P.
as to legality of securities.*
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Smith Helms Mulliss & Moore, L.L.P.
(included in Exhibit 5.1).*
24.1 Power of Attorney and Certified Resolutions.*
99.1 Bank South Corporation Key Employee Stock Option
Plan (1982).
99.2 Southern Bancorp, Inc. 1986 Incentive Stock Option
Plan and 1986 Nonstatutory Stock Option Plan.
99.3 Material Provisions of the Heritage Bancshares, Inc.
Employees' Non-Qualified Stock Option Plan.
99.4 Bank South Corporation Key Employee Stock Option
Plan (1992).
99.5 Bank South Corporation 1993 Equity Incentive Plan.
99.6 1988 Substitute Stock Option Plan of Chattahoochee
Bancorp, Inc. for the 1987 Stock Option Plan of
The Buckhead Bank.
99.7 1988 Substitute Stock Option Plan of Chattahoochee
Bancorp, Inc. for the 1987 Stock Option Plan of
The Chattahoochee Financial Corporation.
99.8 The Merchant Bank of Atlanta Incentive Stock Option Plan.
99.9 Bank South Corporation 1994 Stock Option Plan
for Outside Directors.
99.10 Gwinnett Bancshares, Inc. Stock Option Plan.
<PAGE>
Exhibit No. Description of Exhibit
99.11 Provisions of North Carolina law relating to
indemnification of directors and officers
(incorporated herein by reference to Exhibit 99.1
of the NationsBank Corporation Registration
Statement on Form S-3 (Registration No. 33-63097)
filed on September 29, 1995.)
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* Previously filed as an exhibit to the Registrant's Registration Statement
on Form S-4 to which this is Post-Effective Amendment No. 1.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Post-Effective
Amendment No. 1 on Form S-8 to the Registration Statement on Form S-4
(Registration No. 33-63351) of NationsBank Corporation of our report dated
January 13, 1995, which appears on page 57 of the 1994 Annual Report to
Shareholders of NationsBank Corporation, which is incorporated by reference in
NationsBank Corporation's Annual Report on Form 10-K for the year ended December
31, 1994.
PRICE WATERHOUSE LLP
Charlotte, North Carolina
January 10, 1996
BANK SOUTH CORPORATION
KEY EMPLOYEE STOCK OPTION PLAN (1982)
<PAGE>
BANK SOUTH CORPORATION
KEY EMPLOYEE STOCK OPTION PLAN
ARTICLE I
Purpose, Scope and Administration of the Plan
1.1 Purpose
The purpose of the Plan is to promote the long-term
success of Bank South Corporation and its subsidiaries
by providing financial incentives to key employees who are
in positions to make significant contributions toward such
success. The Plan is designed to attract individuals of
outstanding ability to employment with Bank South Corporation
and its subsidiaries and to encourage key employees
to acquire a proprietary interest in Bank South Corporation,
to continue employment with Bank South Corporation or its
subsidiaries and to render superior performance during
such employment.
1.2 Definitions
Unless the context clearly indicates otherwise, for purposes
of this Plan the following terms have the respective
meanings set forth below:
(a) "Board of Directors" means the Board of Directors of
the Bank South Corporation.
<PAGE>
(b) "Code" means the Internal Revenue Code of 1954,
as amended.
(c) "Committee" means the Stock Option Committee of
the Board of Directors, which Committee shall be
composed of not less than three members of the
Board of Directors who are not employees of the
Company and who are not at the time of exercising
discretion in administering the Plan eligible, and
have not at any time within one year prior thereto
been eligible, for selection as a person to whom
Options or Stock Appreciation Rights may be granted
pursuant to the Plan or any other plan of the Company
or any of its affiliates entitling the participants
therein to acquire stock, stock options or stock
appreciation rights of the Company or any of its
affiliates.
(d) "Common Stock" means the common stock of Bank South
Corporation, par value $5.00 per share, or such other
class of shares or other securities to which the
provisions of the Plan may be applicable by reason
of the operation of Section 4.1 hereof.
(e) "Company" means Bank South Corporation, and also means
any corporation of which a majority of the voting
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capital stock is owned directly or indirectly
by Bank South Corporation or any of its subsidiaries
which is a Company hereunder, and any other corporation
designated by the Committee as being a Company
hereunder (but only during the period of such
ownership or designation).
(f) "Fair Market Value" of a share of Common Stock on
any particular date means (1) if the Common Stock
is not then traded on a national stock exchange,
the mean between the closing composite inter-dealer
"bid" and "ask" prices for Common Stock, as quoted
by NASDAQ (i) on such date, or (ii) if no "bid" and
"ask" prices are quoted on such date, then on the
next preceding date on which such prices were quoted;
or (2) if the Common Stock is then traded on a
national stock exchange, the closing price on such
date of a share of the Common Stock as traded on
the largest stock exchange on which it is then traded.
(g) "Grant Date," as used with respect to a particular
Option or Stock Appreciation Right, means the date as
of which such Option or Right is granted by the
Committee pursuant to the Plan.
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(h) "Grantee" means the key employee to whom an Option or
Stock Appreciation Right is granted by the Committee pursuant to the
Plan.
(i) "Incentive Stock Option" means an Option that qualifies as an
Incentive Stock Option as described in Section 422A of the Code.
(j) "Option" means an Option granted by the Committee
pursuant to Article II to purchase shares of Common
Stock, which shall be designated at the time of grant
as either an Incentive Stock Option or a Supplemental
Stock Option, as provided in Section 2.1 hereof.
(k) "Option Agreement" means the agreement between the Company
and a Grantee under which the Grantee is granted an Option and
Stock Appreciation Rights pursuant to the Plan.
(l) "Option Period" means, with respect to any Option or Stock
Appreciation Right granted hereunder, the period beginning
on the Grant Date and ending at such time not later than the tenth annual
anniversary of the Grant Date, as the Committee, in its sole
discretion, shall determine and during which the
Option or Stock Appreciation Right may be exercised.
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(m) "Plan" means the Bank South Corporation Key Employee Stock
Option Plan as set forth herein and as amended from time to time.
(n) "Retirement," as applied to a Grantee, means the
Grantee's termination of employment in a manner
which qualifies the Grantee to receive immediately
payable retirement benefits under the Bank of the
South, N.A. Employees Retirement Plan and Trust,
under the successor or replacement of such Retirement
Plan if it is then no longer in effect or under any
other retirement plan maintained or adopted by Bank
South Corporation which is determined by the Committee
to be the functional equivalent of such Retirement Plan.
(o) "Stock Appreciation Right" means a right granted
pursuant to Article III hereof by the Committee,
in conjunction with an Option, to receive payment equal
to any increase in the Fair Market Value of a
share of Common Stock from the Grant Date to the date
of exercise of such right, in lieu of exercise of
the Option for such share.
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(p) "Supplemental Stock Option" means any Option granted under this
Plan, other than an Incentive Stock Option.
(q) "Total and Permanent Disability," as applied to a Grantee,
means that the Grantee (1) has established to the satisfaction of the
Committee that the Grantee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not
less than 12 months (all within the meaning of Section 105[d] [4] of the Code),
and (2) has satisfied any requirement imposed by the
Committee in regard to evidence of such disability.
1.3 Aggregate Limitation
(a) The aggregate number of shares of Common Stock with
respect to which Options and Stock Appreciation Rights
may be granted shall not exceed 225,000 shares of Common
Stock, subject to possible adjustment in accordance with Section 4.1.
(b) Any shares of Common Stock to be delivered by the
Company upon the exercise of the Options or Stock
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Appreciation Rights shall at the discretion of the Board
of Directors, be issued from Bank South Corporation's
authorized but unissued shares of Common Stock or be
transferred from any available treasury stock.
(c) In the event that any Option or Stock Appreciation
Right expires or otherwise terminates prior to being
fully exercised, the Committee may grant new Options
and Stock Appreciation Rights hereunder to any eligible
Grantee for the shares with respect to which the
expired or terminated Option or Stock Appreciation
Rights were not exercised.
1.4 Administration of the Plan
(a) The Plan shall be administered by the Committee which
shall have the authority:
(1) To determine those key employees of the Company
to whom, and the times at which, Options and
Stock Appreciation Rights shall be granted and
the number of shares of Common Stock to be
subject to each such Option and Rights, taking
into consideration the nature of the services
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rendered by the particular employee, the employee's
potential contribution to the long-term success
of the Company and such other factors as the
Committee in its discretion shall deem relevant;
(2) To interpret and construe the provisions of the
Plan and to establish rules and regulations relating
to it;
(3) To prescribe the terms and conditions of the
Option Agreements for the grant of Options and
Stock Appreciation Rights (which need not be
identical) in accordance and consistent with
the requirements of the Plan; and
(4) To make all other determinations necessary or
advisable to administer the Plan in a proper and
effective manner.
(b) All decisions and determinations of the Committee
in the administration of the Plan and on questions
or other matters concerning the Plan or any Option
or Stock Appreciation Right shall be final, conclusive
and binding on all persons, including, without
limitation, the Company, the shareholders and
directors of the Company and any persons having any
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interest in any Options or Stock Appreciation Rights
which may be granted under the Plan.
1.5 Eligibility for Awards
The Committee shall designate from time to time the key
employees of the Company who are to be granted Options and
Stock Appreciation Rights. In no event may a member of
the Committee or any Director who is not an employee of
the Company be granted an Option or Stock Appreciation
Right under this Plan.
1.6 Effective Date and Duration of Plan
The Plan shall become effective upon its adoption by the
Board of Directors; provided, that any grant of Options or
Stock Appreciation Rights under the Plan prior to approval
of the Plan by the shareholders of Bank South Corporation
is subject to such shareholder approval with twelve
months of adoption of the Plan by the Board of Directors.
Unless previously terminated by the Board of Directors,
the Plan (but not any then outstanding Options or Stock
Appreciation Rights which have not yet expired or otherwise
terminated) shall terminate on the tenth annual anniversary
of its adoption by the Board of Directors.
9
<PAGE>
ARTICLE II
Stock Options
2.1 Grant of Options
The Committee may from time to time, subject to the
provisions of the Plan, grant Options to key employees
under appropriate Option Agreements to purchase shares of
Common Stock up to the aggregate number of shares of
Common Stock set forth in Section 1.3(a). The Committee
may designate any Option which satisfies the requirements
of Section 2.3 hereof as an Incentive Stock Option and
may designate any Option granted hereunder as a Supplemental
Stock Option, or the Committee may designate a portion of
an Option as an Incentive Stock Option (so long as that
portion satisfies the requirements of Section 2.3 hereof)
and the remaining portion as a Supplemental Stock Option.
Any portion of an Option that is not designated as an
Incentive Stock Option shall be a Supplemental Stock
Option. A Supplemental Stock Option must satisfy the
requirements of Section 2.2 hereof, but shall not be
subject to the requirements of Section 2.3.
2.2 Option Requirements
(a) An Option shall be evidenced by an Option Agreement
specifying the number of shares of Common Stock that
10
<PAGE>
may be purchased by its exercise and containing such
other terms and conditions consistent with the Plan
as the Committee shall determine to be applicable
to that particular Option.
(b) No Option shall be granted under the Plan on or after
the tenth annual anniversary of the date upon which
the Plan was adopted by the Board of Directors.
(c) An Option shall not be exercisable during the first
twelve months commencing on the Grant Date except
as may be specifically allowed by the Committee in
the event of a merger, acquisition or other extraordinary
transaction in which Bank South Corporation is not
the surviving entity, in the event of a change
in the control (as defined in Rule 12b-2(f) promulgated
under the Securities Exchange Act of 1934) or in the
event the Committee, in its sole discretion, otherwise
determines and specifies in the applicable Option
Agreement that an Option is exercisable during the
first twelve months following its Grant Date.
(d) An Option shall expire by its terms at the expiration
of the Option Period and shall not be exercisable
thereafter.
11
<PAGE>
(e) The Committee may provide in the Option Agreement
for the expiration or termination of the Option
prior to the expiration of the Option Period, upon
the occurrence of any event specified by the
Committee.
(f) The option price per share of Common Stock shall be
equal to the Fair Market Value of a share of Common
Stock on the Grant Date.
(g) An Option shall not be transferable other than by
will or the laws of descent and distribution and,
during the Grantee's lifetime, an Option shall be
exercisable only by the Grantee, or if the Grantee
is disabled and the Option remains exercisable, by
his or her duly appointed guardian or other legal
representative.
(h) Notwithstanding the Option Period applicable to an
Option granted hereunder, such Option, to the extent
that it has not previously been exercised, shall
terminate upon the earliest to occur of (1) the
expiration of the applicable Option Period as set
forth in the Option Agreement granting such Option,
(2) the expiration of three months after the Grantee's
12
<PAGE>
Retirement, (3) the expiration of one year after
the Grantee ceases to be an employee of the Company
due to Total and Permanent Disability, (4) the
expiration of two years after the Grantee ceases
to be an employee of the Company due to the death
of the Grantee or such later time as may be approved
by the Committee, or (5) the date on which the
Grantee gives the Company, or the Company gives the
Grantee, notice of termination of the Grantee's
employment with the Company for any reason other
than Retirement, Total and Permanent Disability or
death.
(i) A person electing to exercise an Option shall give
written notice of such election to the Company, in
such form as the Committee may require, accompanied
by payment in the manner determined by the Committee,
of the full purchase price of the shares of Common
Stock for which the election is made. Payment of
the purchase price shall be made in cash or in such
other form as the Committee may approve, including
shares of Common Stock valued at their Fair Market
Value on the date of exercise of the Option.
13
<PAGE>
(j) The exercise of any number of Stock Appreciation
Rights granted under an Option Agreement shall result
in a simultaneous corresponding reduction in the
number of shares of Common Stock then available for
purchase by exercise of the related Option.
2.3 Incentive Stock Option Requirements
(a) An Option designated by the Committee as an
Incentive Stock Option is intended to qualify as
an "incentive stock option" within the meaning
of Subsection (b) of Section 422A of the Code and
shall satisfy, in addition to the conditions of
Section 2.2 above, the conditions set forth in this
Section 2.3.
(b) An Incentive Stock Option shall not be granted to
an individual who, on the Grant Date, owns stock
possessing more than ten percent of the total combined
voting power of all classes of stock of the
Company, unless the Committee provides in the Option
Agreement with any such individual that the option
price per share of Common Stock will not be less
than 110% of the Fair Market Value of a share of
Common Stock on the Grant Date and that the Option
14
<PAGE>
Period will not extend beyond five years from the
Grant Date.
(c) An Incentive Stock Option shall not be exercisable
while there is outstanding (within the meaning of
Section 422A[c][7] of the Code) any other "incentive
stock option," within the meaning of Subsection (b)
of Section 422A of the Code, which was granted before
the granting of such Incentive Stock Option to purchase
Common Stock or any other stock in the Company, in a
corporation which (at the time of the granting of such
Option) is a parent or subsidiary corporation of the
Company or in a predecessor corporation of any such
corporations.
(d) The aggregate Fair Market Value, determined on the
Grant Date, of the shares of Common Stock with
respect to which any Grantee may be granted one or
more Incentive Stock Options under the Plan or
incentive stock options (within the meaning of Sub-
section [b] of Section 422A of the Code) under any
other plan of the Company or any parent or subsidiary
thereof, in any calendar year shall not exceed
$100,000.00 plus any "unused limit carryover" to
such year, determined in accordance with Section
422A(c)(4) of the Code.
ARTICLE III
Stock Appreciation Rights
3.1 Grant of Rights
(a) In conjunction with any Option granted hereunder,
the Committee may, in its discretion, grant a Stock
Appreciation Right with respect to each share of
Common Stock which may be purchased by the exercise
of such Option.
(b) Upon exercise of a Stock Appreciation Right, the
Company shall pay the amount by which the Fair
Market Value of a share of Common Stock on the
date of exercise exceeds the Fair Market Value of
a share of Common Stock on the Grant Date, but only
to the extent that such amount does not exceed
200% of the Fair Market Value of a share of Common
Stock on the Grant Date. A Stock Appreciation Right
may not be exercised unless the Fair Market Value of
a share of Common Stock on the date of exercise exceeds
the Fair Market Value of a share of Common Stock on
the Grant Date.
(c) Payment upon exercise of a Stock Appreciation Right
may be made, in the sole discretion of the Committee,
15
<PAGE>
in (1) cash, (2) in shares of Common Stock valued
at Fair Market Value on the date of exercise, or
(3) partly in cash and partly in shares of Common
Stock.
3.2 Rights Requirements
(a) Stock Appreciation Rights shall be granted under and
evidenced by the Option Agreement under which the
related Option is granted, containing such terms and
conditions consistent with the Plan as the Committee
shall determine, and shall be exercisable to the extent
allowed under such terms and conditions.
(b) Stock Appreciation Rights granted in relation to an
Option (1) shall be exercisable only to the extent
and only when the option is exercisable, (2) shall
expire or otherwise terminate simultaneously
with the expiration or termination of the related
Option, (3) shall be transferable only when the
related Option is transferable and under the same
conditions, (4) shall be exercised by the Grantee
giving written notice of such exercise to the
Company, in such form as the Committee may require,
and (5) shall be reduced upon each exercise of the
related Option by the number of Stock Appreciation
16
<PAGE>
Rights which corresponds to the number of shares of
Common Stock purchased pursuant to such exercise.
ARTICLE IV
General Provisions
4.1 Adjustment Provisions
(a) In the event of (1) any dividend payable in shares
of Common Stock; (2) any recapitalization,
reclassification, split-up or consolidation of,
or other change in, the Common Stock; or (3) an
exchange of the outstanding shares of Common
Stock, in connection with a merger, consolidation
or other reorganization of or involving Bank South
Corporation or a sale by Bank South Corporation
of all or a portion of its assets, for a different
number or class of shares of stock or other securities
of Bank South Corporation or for shares of the stock
or other securities of any other corporation; then
the Committee shall, in such manner as it shall
determine in its sole discretion, appropriately
adjust the number and class of shares or other
securities which shall be subject to Options and
Stock Appreciation Rights and/or the purchase price
17
<PAGE>
per share which must be paid thereafter upon exercise
of any Option and which will be used to determine the
amount which any Grantee would receive upon exercise
thereafter of Stock Appreciation Rights. Any such
adjustments made by the Committee shall be final,
conclusive and binding upon all persons, including,
without limitation, the Company, the shareholders and
directors of the Company and any persons having any
interest in any Options or Stock Appreciation Rights
which may be granted under the Plan.
(b) Except as provided in paragraph (a) immediately above,
issuance by the Company of shares of stock of any class
or securities convertible into shares of stock of any
class shall not affect the Options or Stock Appreciation
Rights.
4.2 Additional Conditions
Any shares of Common Stock issued or transferred under any
provision of the Plan may be issued or transferred subject
to such conditions, in addition to those specifically pro-
vided in the Plan, as the Committee or Company may impose.
4.3 No Rights as Shareholder or to Employment
No Grantee or any other person authorized to purchase
Common Stock upon exercise of an Option shall have any
18
<PAGE>
interest in or shareholder rights with respect to any
shares of the Common Stock which are subject to any
Option or Stock Appreciation Rights until such shares
have been issued and delivered to the Grantee or any
such person pursuant to the exercise of such Option.
Furthermore, the Plan shall not confer upon any Grantee
any rights of employment with the Company, including
without limitation any right to continue in the employ of
the Company, or affect the right of the Company to
terminate the employment of a Grantee at any time, with
or without cause.
4.4 Legal Restrictions
If in the opinion of legal counsel for the Company the
issuance or sale of any shares of Common Stock pursuant
to the exercise of an Option would not be lawful for any
reason, including without limitation the inability of
the Company to obtain from any governmental authority or
regulatory body having jurisdiction the authority deemed
by such counsel to be necessary to such issuance or sale,
the Company shall not be obligated to issue or sell any
Common Stock pursuant to the exercise of an Option to its
Grantee or any other authorized person unless a registration
statement that complies with the provisions of the Securities
Act of 1933, as amended (the "Act") in respect of such shares
19
<PAGE>
is in effect at the time thereof, or other appropriate
action has been taken under and pursuant to the terms and
provisions of the Act, or the Company receives evidence
satisfactory to such counsel that the issuance and sale
of such shares, in the absence of an effective registration
statement or other appropriate action, would not constitute
a violation of the Act or any applicable state securities
law. The Company is in no event obligated to register any
such shares, to comply with any exemption from registration
requirements or to take any other action which may be
required in order to permit, or to remedy or remove any
prohibition or limitation on, the issuance or sale of such
shares to any Grantee or other authorized person.
4.5 Rights Unaffected
The existence of the Options and Stock Appreciation Rights
shall not affect: the right or power of the Company or
its shareholders to make adjustments, recapitalizations,
reorganizations or other changes in the Company's capital
structure or its business; any issue of bonds, debentures,
preferred or prior preference stocks affecting the Common
Stock or the rights thereof; the dissolution or liquidation
of the Company, or sale or transfer of any part of its
assets or business; or any other corporate act, whether of
a similar character or otherwise.
20
<PAGE>
4.6 Withholding Taxes
As a condition of exercise of an Option or Stock Appreciation
Right, the Company may, in its sole discretion, withhold or
require the Grantee to pay or reimburse the Company for any
taxes which the Company determines are required to be
withheld in connection with the grant or any exercise of
an Option or Stock Appreciation Right.
4.7 Choice of Law
The validity, interpretation and administration of the
Plan and of any rules, regulations, determinations or
decisions made thereunder, and the rights of any and all
persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance
with the laws of the State of Georgia.
Without limiting the generality of the foregoing, the period
within which any action in connection with the Plan must
be commenced shall be governed by the Laws of the State of
Georgia, without regard to the place where the act or
omission complained of took place, the residence of any party
to such action or the place where the action may be brought
or maintained.
21
<PAGE>
4.8 Amendment, Suspension and Termination of Plan
The Plan may, from time to time, be terminated, suspended
or amended by the Board of Directors in such respects as
it shall deem advisable in order that the Incentive
Stock Options granted hereunder shall be "incentive stock
options" as such term is defined in Section 422A of the
Code, or to conform to any change in any law or regulation
governing same or in any other respect; provided, however,
that no such amendment shall change the following:
(a) The maximum aggregate number of shares for which
Options may be granted under the Plan, except as
required under any adjustment pursuant to Section
4.1 hereof;
(b) The Option exercise price, with the exception of
any change in such price required as a result of
any adjustment pursuant to Section 4.1 hereof and
with the further exception of changes in determining
Fair Market Value of shares of Common Stock to
conform with any then applicable provision of the
Code or regulations promulgated thereunder;
(c) The maximum period during which Options or Stock
Appreciation Rights may be exercised;
22
<PAGE>
(d) The maximum amount which may be paid upon exercise
of a Stock Appreciation Right;
(e) The termination date of the Plan in any manner which
would extend such date; or
(f) The requirements as to eligibility for participation
in the Plan in any material respect.
Notwithstanding any other provision herein contained, the
Plan shall terminate and all Options and Stock Appreciation
Rights previously granted shall terminate, in the event and
on the date of liquidation or dissolution of the Company.
AS APPROVED BY THE BOARD OF DIRECTORS OF BANK SOUTH
CORPORATION ON JUNE 17, 1982.
BANK SOUTH CORPORATION
BY:
------------------------
Chairman of the Board
23
<PAGE>
AMENDMENT NO. 3
TO
BANK SOUTH CORPORATION
KEY EMPLOYEE STOCK OPTION PLAN
THIS AMENDMENT made as of the 13 day of February, 1992, by BANK SOUTH
CORPORATION, a corporation organized under the laws of the State of
Georgia (the "Company");
W I T N E S S E T H:
WHEREAS, the Company established the Bank South Corporation Key Employee
Stock Option Plan (the "Plan"), which was approved by the Board of Directors
of Bank South Corporation on June 17, 1982; and
WHEREAS, the Board of Directors has previously approved certain amendments
to the Plan, effective as of August 5, 1991, in connection with the employment
of certain executives by the Company; and
WHEREAS, the Company now desires to evidence the adoption of such
amendments in the manner hereinafter provided;
NOW, THEREFORE, the Plan is hereby amended as follows:
1.
Section 2.2(c)(2) of the Plan is hereby amended by adding the following
to the end of the present section:
"The Committee may, pursuant to its authority under Sections 2.2(a)
and 2.2(c)(1)(c), expand or restrict the events which constitute a 'Change
in Control' for purposes of all or a portion of the Options covered by
a particular Option Agreement."
2.
Section 2.2(f) of the Plan is hereby amended by deleting the present
section in its entirety and substituting the following in lieu thereof:
"(f) The option price per share of Common Stock shall be not less
than the Fair Market Value of a share of Common Stock on the Grant
Date."
3.
Section 2.2(h) of the Plan is hereby amended by adding the following after
the word "hereunder" and before the comma in the second line of the present
section:
<PAGE>
"and except as otherwise provided in the applicable Option Agreement"
4.
The foregoing amendments to the Plan shall be effective as of August 5,
1991. Except as herein amended, the Plan shall remain in full force and
effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed
by its duly authorized officers the day and year first above written.
(CORPORATE SEAL) BANK SOUTH CORPORATION
ATTEST:
By: (Signature of Gregory N. Stoddard) By: (Signature of Ralph E. Hutchins, Jr.)
Title: Corporate Secretary Title: Sr. Executive Vice President
<PAGE>
This is a true and correct copy of a resolution passed by the Board of
Directors on April 16, 1987.
(Signature of Edward B. Grimball)
Edward B. Grimball, Secretary
RESOLUTION FOR AMENDMENT NO. 2 TO THE BANK SOUTH
KEY EMPLOYEE STOCK OPTION PLAN
Corporation
WHEREAS, the Board has reviewed and considered Amendment No. 2 to the
Bank South Key Employee Stock Option Plan in the form attached hereto;
BE IT RESOLVED, that amendment No. 2 to the Plan is hereby adopted
and approved, such amendment to be effective January 1, 1987; that the
officers of the Corporation are authorized and directed to execute this
amendment; and that such amendment be submitted to the Shareholders
of the Corporation for approval.
<PAGE>
AMENDMENT NO. 2 TO THE
BANK SOUTH CORPORATION
KEY EMPLOYEE STOCK OPTION PLAN
THIS AMENDMENT, made this day of March, 1987 by Bank South
Corporation, a corporation organized under the laws of the State of Georgia
(hereinafter together with the subsidiaries collectively referred to as the
"Company"):
W I T N E S S E T H:
WHEREAS, the Company established the Bank South Corporation Key Employee
Stock Option Plan (the "Plan"), which was approved by the Board of Directors
of Bank South Corporation on June 17, 1982; and
WHEREAS, the Company now desires to amend the Plan pursuant to Section
4.8 thereof;
NOW, THEREFORE, the Plan is hereby amended as follows:
1.
Section 1.4(a) of the Plan is hereby amended by deleting paragraph (5)
thereof in its entirety and substituting the following in lieu thereof:
"(5) To determine whether any Grantee of a Supplemental Stock
Option shall be entitled to a Tax Equalization Payment. If the
Committee, in its sole discretion, determines that such a
payment should be made, the following conditions shall apply:
(A) The amount of the Tax Equalization Payment shall be a
percentage of the amount the Grantee includes in income (as
described below) as a result of the exercise of a Supplemental
Stock Option granted under the terms of this Plan. This
percentage shall be determined by the Committee and shall
reflect (i) the individual income tax rate that will apply
to the amount the Grantee includes in income, (ii) the
corporate income tax rate for the year the option is exercised,
and (iii) the relationship between such individual income tax
rate and corporate income tax rate; (B) For purposes hereof, the
amount the Grantee includes in income shall be determined by
subtracting the aggregate price Grantee paid for the shares of
Common Stock upon exercise of the Option from the aggregate
Fair Market Value of such shares of Common Stock on the date
of exercise."
<PAGE>
2.
The foregoing amendment to the Plan shall be effective as of
January 1, 1987. Except as herein amended, the Plan shall remain in full force
and effect.
IN WITNESS WHEREOF, the Corporation has caused this Amendment to be
executed by its duly authorized officers the day and year first above
written.
(CORPORATE SEAL) BANK SOUTH CORPORATION
By:
Attest
<PAGE>
AMENDMENT NO. 1 TO THE
BANK SOUTH CORPORATION
KEY EMPLOYEE STOCK OPTION PLAN
THIS AMENDMENT, made this 19th day of February, 1987 by Bank South
Corporation, a corporation organized under the laws of the State of Georgia
(hereinafter together with the subsidiaries collectively referred to as the
"Company"):
W I T N E S S E H:
WHEREAS, the Company established the Bank South Corporation Key
Employee Stock Option Plan (the "Plan"), which was approved by the Board of
Directors of Bank South Corporation on June 17, 1982; and
WHEREAS, the Company now desires to amend the Plan pursuant to Section
4.8 thereof;
NOW THEREFORE, the Plan is hereby amended as follows:
1.
Section 1.2 of the Plan is hereby amended by the addition of the
following new paragraph (r) at the end of the present provision:
"(r) "Tax Equalization Payment" means a cash payment which may
be payable to Grantee under the terms of Section 1.4(a)(5)
upon exercise of a Supplemental Stock Option which is granted on
or after January 1, 1987 under this Plan."
2.
Section 1.3(a) of the Plan is hereby amended by deleting the present
section in its entirety and substituting the following in lieu thereof;
"Aggregate Limitation
(a) The aggregate number of shares of Common Stock with respect
to which Options and Stock Appreciation Rights may be granted
shall not exceed 1,928,125 shares of Common Stock, subject to
possible adjustments in accordance with Section 4.1"
<PAGE>
3.
Section 1.4(a) of the Plan is hereby amended by the addition of the
following new paragraph (5) at the end of the present provision:
"(5) To determine whether any Grantee of a Supplemental Stock
Option shall be entitled to a Tax Equalization Payment. If the
Committee, in its sole discretion, determines that such a
payment should be paid, the following conditions shall apply:
(A) The amount of the Tax Equalization Payment shall be equal
to 28% of the appreciated value of the shares of Common Stock
acquired upon exercise of a Supplemental Stock Option granted
under the terms of this Plan, (B) For purposes hereof, the
appreciated value shall be determined by subtracting the
aggregate price Grantee paid for the shares of Common Stock
upon exercise of the Option from the aggregate Fair Market
Value of such shares of Common Stock on the date of
exercise."
4.
Section 2.2(c) of the Plan is hereby amended by deleting the present
section in its entirety and substituting the following in lieu thereof;
"(c)(1) An Option shall not be exercisable during the first
twelve months commencing on the Grant Date (a) except as may
be specifically allowed by the Committee in the event of a
merger, acquisition or other extraordinary transaction in
which Bank South Corporation is not the surviving entity,
(b) in the event of a Change in Control (as hereinafter defined),
or (c) in the event the Committee in its sole discretion,
otherwise determines and specifies in the applicable Option
Agreement that the Option is exercisable during the first
twelve months following its Grant Date, as used herein.
(2) "Change in Control" means (A) the acquisition, directly
or indirectly, by any "person" (as such term is used in the
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) within any twelve month period, of
securities of Bank South Corporation representing an
aggregate
<PAGE>
of 25% or more of the combined voting power of Bank South
Corporation's then outstanding securities, or (B) during
any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors,
cease for any reason to constitute at least a majority
thereof, unless the election of each new director was
approved in advance by a vote of at least a majority of
the directors then still in office who were directors at
the beginning of the period."
5.
Section 2.3(c) of the Plan is hereby amended by the addition of the
following sentence at the end of the present provision:
"This provision shall not apply to any Incentive Stock
Option granted on or after January 1, 1987."
6.
Section 2.3(d) of the Plan is hereby amended by the addition of the
following new paragraph at the end of the present provision:
"The immediately preceding paragraph of this Section 2.3(d) shall
not apply to any Incentive Stock Option granted on or after
January 1, 1987. With respect to such Incentive Stock Options,
the following restriction shall apply: the aggregate Fair
Market Value (determined on the Grant Date) of the shares of
Common Stock with respect to which such Incentive Stock
Options are exercisable for the first time by an employee
during any calendar year (under all such plans of the
employee's employer corporation and its parent and subsidiary
corporations) shall not exceed $100,000."
7.
The foregoing amendments to the Plan shall be effective as of
January 1, 1987. Except as herein amended, the Plan shall remain in full
force and effect.
IN WITNESS WHEREOF, the Corporation has caused this Amendment to be
executed by its duly authorized officers the day and year first above
written.
(CORPORATE SEAL) BANK SOUTH CORPORATION
By: (Signature of Edward B. Grimball)
Attest Senior Vice President and Secretary
SOUTHERN BANCORP, INC.
1986 INCENTIVE STOCK OPTION PLAN
AND
1986 NONSTATUTORY STOCK OPTION PLAN
<PAGE>
SOUTHERN BANCORP, INC.
1986 INCENTIVE STOCK OPTION PLAN
AND
1986 NONSTATUTORY STOCK OPTION PLAN
I. Purpose
(a) This Plan document is intended to implement and govern two separate Stock
Option Plans of Southern Bancorp, Inc., a Georgia Corporation ("Company"), and
its Parent Corporation or Subsidiary Corporation(s), if any:
(i) The Southern Bancorp, Inc. 1986 Incentive Stock Option Plan ("Plan A"); and
(ii) The Southern Bancorp, Inc. 1986 Nonstatutory Stock Option Plan ("Plan B").
Plan A provides for the granting of options that are intended to qualify as
incentive stock options ("Incentive Stock Options") within the meaning of
Section 422A(b) of the Internal Revenue Code. Plan B provides for the granting
of options that are not intended to so qualify. Unless specified otherwise,
all provisions of this Plan relate equally to both Plan A and Plan B, which
Plans are condensed into one plan document solely for purposes of
administrative convenience and are not intended to constitute tandem plans.
(b) The purpose of these Plans is to further the interests of the Company by
assisting the Company in retaining and developing strong management and
inducing individuals to become and remain employees of the Company. The Plans
are intended to accomplish this purpose by allowing the Company to grant
options ("Options") to purchase shares of the Company's common stock
("Common Stock"). (For purposes of these Plans, "Parent Corporation" and
"Subsidiary Corporation" shall mean corporations as defined in Sections 425(e)
and 425(f), respectively, of the Internal Revenue Code. Additionally, "Company"
shall include any Parent Corporation or Subsidiary Corporation that may exist.)
2. Administration
(a) The Plans shall be administered by the Board of Directors or by a committee
("Committee") appointed by the Board and consisting of not less than three
Board members who are not eligible to participate in either of these plans.
(For purposes of this plan document, the term "Board" shall mean the Committee
to the extent that the Board's powers have been delegated to the Committee.)
(b) The Board shall have sole authority in its absolute discretion to (i)
determine which officers and other key employees of the Company shall receive
Options ("Optionees"), and (ii) subject to the express provisions of these
Plans, to determine the time when Options shall be granted, the terms and
conditions of Options other than those terms and conditions fixed under these
Plans, and the number of shares which may be issued upon exercise of the
Options. The Board shall adopt by resolution such rules and regulations as
<PAGE>
may be required to carry out the purposes of the Plans and shall have authority
to do everything necessary or appropriate to administer the Plans. All
decisions, determinations and interpretations of the Board shall be final and
binding on all Optionees. Administration of the Plans with respect to
members of the Committee shall not be delegated, but shall at all times remain
vested in the Board. The Board may from time to time remove members from, or
add members to , the Committee and vacancies on the Committee shall be filled
by the Board. Furthermore, the Board at any time by resolution may abolish the
Committee and revest in the Board the administration of the Plans.
(c) With respect to Options granted to a key employee who is also a member of
the Board, the Board shall take actions by a vote sufficient without counting
the vote of such member of the Board, although such member of the Board may be
counted in determining the presence of a quorum at a meeting of the Board which
authorizes the granting of Options to such member of the Board.
(d) The Committee, if appointed pursuant to this Section 2, shall report to
the Board the name of employees granted Options, the number of shares covered
by each Option and the terms and conditions of each such Option.
3. Eligibility
Persons who shall be eligible to receive Options under these Plans shall be
employees of the Company who render those types of services which tend to
contribute materially to the success of the Company.
The determination as to whether an officer or other key employee is eligible
to receive Options hereunder shall be made by the Board in its sole discretion,
and the decision of the Board shall be binding and final.
4. Number of Shares
The maximum aggregate number of shares which may be optioned and sold under
these Plans is 30,000 shares of authorized but unissued Common Stock of the
Company. In the event that Options granted under the Plans shall terminate or
expire without being exercised, in whole or in part, the shares subject to
such unexercised Options shall again become available for the granting of an
Option under these Plans.
5. Option Price
(a) Plan A. The option price ("Option Price") for shares of Common Stock to be
issued under Plan A shall be equal to or greater than the fair market value of
such shares on the date on which the Option covering such shares is granted,
except that if on the date on which such Option is granted the Optionee is a
Restricted Shareholder, then such Option Price shall be equal to or greater
than one hundred ten percent (110%) of the fair market value of the shares on
the date such Option is granted. For the purposes of Plan A, a "Restricted
Shareholder" is an individual who, at the time an Option is granted under
Plan A, owns stock possessing more than ten percent (10%) of the total
combined vesting power of all classes of stock of the Company, with stock
ownership to be determined in light of the attribution rules set forth in
Section 425(d) of the Internal Revenue Code. The fair market value of shares
of Common Stock for all purposes of Plan A shall be determined by the Board
in its sole discretion, exercised in good faith.
2
<PAGE>
(b) Plan B. The Option Price for shares of Common Stock to be issued under Plan
B shall be determined by the Board in its sole discretion, but in no event shall
such Option Price be less than eighty-five percent (85%) of the fair market
value of such shares on the date on which the Option covering such shares is
granted. The fair market value of shares of Common Stock for all purposes of
Plan B shall be determined by the Board in its sole discretion, exercised in
good faith.
6. Term of the Plans
The Plans shall be effective as of May 29, 1986, and shall continue in effect
until May 29, 1996 unless terminated earlier. No Option may be granted
hereunder after May 29, 1996.
7. Exercise of Options
Subject to the limitations set forth herein and/or in any applicable Stock
Option Agreement entered into hereunder, Options granted under these Plans
shall be exercisable in accordance with the following rules:
(a) General. Subject to the other provisions of this Section 7, Options shall
vest and become exercisable at such times and in such installments as the Board
shall provide in each individual Stock Option Agreement. Notwithstanding the
foregoing, the Board may in its sole discretion, accelerate the time at which
an Option or installment thereof may be exercised.
(b) Termination of Options. All installments of an Option shall expire and
terminate on such date as the Board shall determine, but in no event later than
ten (10) years from the date such Option was granted (except that an Option
granted under Plan A to a Restricted Shareholder shall by its terms not be
exercisable after the expiration of five (5) years from the date provided
otherwise in this Section 7 or in the Stock Option Agreement pursuant to which
an Option is granted, an Option shall vest and may be exercised as provided
in such Stock Option Agreement and at any time thereafter until, and including,
the day before the Option Termination Date.
(c) Sale or Reorganization.
(i) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company goes out of existence or becomes
a subsidiary of another corporation, or upon a sale of substantially all the
property or more than twenty-five percent (25%) of the then outstanding stock
of the Company to another corporation, an Option shall become immediately
exercisable with respect to the full number of shares subject to that Option
during the period commencing as of the date an agreement providing for such
transaction is executed and ending as of the earlier of:
(A) The applicable expiration date for such Option as provided for in the
Stock Option Agreement; or
(B) The date on which the disposition of assets or stock contemplated by any
such agreement is consummated.
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<PAGE>
(ii) Upon the consummation of any transaction specified in Section 7(c) (i)
above, these Plans and any unexercised Options issued hereunder (or any
unexercised portion thereof) shall terminate and cease to be effective, unless
provision is made in connection with such transaction for assumption of Options
previously granted or the substitution for such Options of new options covering
the securities of a successor corporation or an affiliate thereof, with
appropriate adjustments as to the number and kind of securities and prices. Any
change or adjustment made pursuant to the terms of this Section 7(c) (ii) shall
be made in such a manner so as not to constitute a "modification" as defined
in Section 425(h) of the Internal Revenue Code and so as not to cause any
Incentive Stock Option issued under Plan A to fail to continue to qualify as
an Incentive Stock Option as defined in Section 422A(b) of the Internal
Revenue Code.
(d) Termination of Employment Other Than by Death or Disability
(i) In the event that the employment of an Optionee with the Company is
terminated for any reason other than retirement, death or permanent and total
disability, any installments under the Option which have not accrued as of
such Optionee's termination date shall expire and become unexercisable as of
such termination date. All vested and exercisable options as of such Optionee's
termination date shall not be exercisable after the effective date of the
Optionee's termination of employment. A leave of absence approved in writing
by the Board shall not be deemed a termination of employment for purposes of
this Section 7(d) (i), but no Option may be exercised during any such leave of
absence except during the first thirty (30) days thereof.
(ii) In the event that the employment of an Optionee with the Company is
terminated by reason of such Optionee's retirement, any installments under
the Option which have not accrued as of such Optionee's retirement date shall
expire and become unexcercisable as of such retirement date. All vested and
excerisable Options granted under Plan A as of such Optionee's retirement date
shall remain excercisable for a period not to exceed twelve (12) months
following such retirement date, or for such longer period as determined
appropriate by the Board, but not to exceed the option termination date. All
vested and exercisable Options granted under Plan B as of such Optionee's
retirement date shall remain exercisable for a period not to exceed twelve (12)
months following such retirement date.
(e) Death or Disability of Optionee While Employed
(i) In the event that the employment of an Optionee with the Company is
terminated by reason of such Optionee's permanent and total disability, any
installments under the Option which have not accrued as of the date of such
Optionee's termination of employment by reason of permanent and total disability
shall expire and become unexercisable as of such termination date. All vested
and exercisable Options granted hereunder to such Optionee shall expire and
become unexercisable as of the earlier of:
(A) The applicable Option Termination Date; or
(B) The date which is twelve (12) months from the date of such Optionee's
termination of employment by reason of permanent and total disability or for
such longer period as determined by the Board. For purposes
4
<PAGE>
of these Plans, the term "permanent and total disability" shall be defined
under Internal Revenue Code Section 105(d) (4).
(ii) In the event that the employment of an Optionee with the Company is
terminated by reason of such Optionee's death, any Options which have not vested
as of the date of such Optionee's termination of employment by reason of death
shall expire and become unexercisable as of such date of death. All vested and
exercisable options granted hereunder to such Optionee shall expire and become
unexercisable as of the earlier of:
(A) The applicable Option Termination Date; or
(B) The first anniversary of the date of such Optionee's termination of
employment by reason of death or for such longer period as determined by the
Board. Any such vested option of a deceased Optionee may be exercised prior to
their expiration only by the person or persons to whom such Optionee's Option
rights pass by will or by the laws of descent and distribution.
(f) Exercise of Options
(i) An Option may be exercised in accordance with this Section 7 as to all
vested Options from time to time during the applicable option period, except
that an Option shall not be exercisable with respect to fractions of a share.
(ii) As a condition to the exercise of an Option, the Board may in its sole
discretion, require the Optionee to pay, in addition to the purchase price of
the shares covered by the Option, an amount equal to any federal, state and
local taxes that may be required to be withheld in connection with the exercise
of such Option.
(g) Sequential Exercise Rule. Notwithstanding any other provision of these
Plans, an Option granted under Plan A as an Incentive Stock Option shall not be
exercisable while there is outstanding (within the meaning of Section 422A(c)
(7) of the Internal Revenue Code) any Incentive Stock Option which was granted,
before the granting of the Option, to the Optionee to purchase stock in his
employer corporation or in a corporation which (at the time of the granting of
the Option) was a Parent Corporation or Subsidiary Corporation of the employer
corporation, or in a predecessor corporation of any such corporations. For
purposes of this Section, an Incentive Stock Option that is exercisable in
installments over a period of years is outstanding until either the exercise
or expiration of all installments.
(h) Payment. The entire Option Price shall be paid in cash at the time the
Option is exercised; provided, however, that an Optionee may elect to pay for
all or some of his Option shares with shares of Common Stock of the Company
previously acquired and owned at the time of exercise by the Optionee, subject
to all restrictions and limitations of applicable law. An Optionee's right to
use Company shares to exercise an Option is expressly conditioned upon his
making representations and warranties satisfactory to the Company regarding his
title to the shares used to exercise such Option. The equivalent dollar value
of the shares used to effect the purchase shall be the fair market value of
the shares as determined by the Board.
8. Shareholder Approval
The Options granted under the Plans are conditioned on approval of the Plans
by the stockholders of the Company as required by applicable law and/or the
Company's Certificate of Incorporation and Bylaws within twelve months.
5
<PAGE>
after approval of the Plans by the Board. No Option granted hereunder shall be
exercisable (or otherwise vest any rights thereunder in the Optionees) unless
and until the Plans have been so approved.
9. Limit on Value and Number of Optioned Shares
The aggregate fair market value (determined as of the date the Option is
granted) of the shares of Common Stock with respect to which any employee may
be granted Incentive Stock Options in any calendar year under all incentive
stock option plans of the Company shall not exceed One Hundred Thousand Dollars
($100,000.00) plus any Unused Limit Carryover to such year. For the purposes
of this Section 9, "Unused Limit Carryover" means the amount defined by Section
422A(c) (4) of the Internal Revenue Code. The limitation imposed by this
Section 9 shall not apply with respect to nonstatutory stock options granted
under Plan B.
10. Stock Option Agreement
The terms and conditions of Options granted under the Plans shall be evidenced
by a Stock Option Agreement executed by the Company and the person to whom the
Option is granted. Each Stock Option Agreement shall incorporate these Plans
by reference and shall include such provisions as are determined to be necessary
or appropriate by the Board.
11. Stock Restriction Agreement
As a condition to the granting of any Option hereunder and the subsequent
exercise of any such Option, the Board may require the Optionee to enter into
a stock restriction agreement with the Company for the purpose of limiting the
sale or other transfer of ownership of Common Stock acquired by the Optionee.
12. Amendment or Termination of the Plans
(a) The Board may amend, suspend and/or terminate the Plans at any time;
provided, however, that except as provided in Section 15 below, the Board shall
not amend the Plans in the following respects without shareholder approval:
(i) To increase the maximum number of shares subject to the Plans;
(ii) To change the designation or class of persons eligible to receive Options
under the Plans;
(iii) To extend the term of the Plans or the maximum Option exercise period; or
(iv) To decrease the minimum price at which shares may be optioned under the
Plans.
(b) Furthermore, the Plans may not, without the approval of the shareholders,
be amended in any manner that would cause Incentive Stock Options issued
hereunder to fail to qualify as Incentive Stock Options as defined in Section
422A(b) of the Internal Revenue Code. Notwithstanding the foregoing, no
amendment, suspension or termination of the Plans shall adversely affect Options
granted on or prior to the date thereof, as evidenced by the execution of a
Stock Option Agreement by both the Company and the Optionee, without the consent
of such Optionee.
6
<PAGE>
13. Options Not Transferable
Options granted under these Plans may not be sold, pledged, hypothecated,
assigned, encumbered, gifted or otherwise transferred or alienated in any
manner, either voluntarily or involuntarily by operation of law, other than
by will or the laws of descent and distribution, and may be exercised during
the lifetime of an Optionee only by such Optionee or, if such Optionee shall
become legally incompetent or disabled, by such Optionee's guardian or legal
representative.
14. Restrictions on Issuance of Shares
(a) Subject to the limitations set forth hereinbelow, the Company shall have the
following registration, qualification and stock exchange approval obligations:
(i) In the event that the Company shall deem it necessary to register the Plans
and/or the shares of Common Stock and/or the Options under the Securities Act
of 1933 or other applicable statutes any shares of Common Stock with respect
to which an Option shall have been exercised, or to qualify any such shares
for exemption from such registration requirements, then the Company shall
take such action at its own expense before delivery of such shares; and/or
(ii) In the event the shares of stock of the Company shall be listed on any
national stock exchange at the time of the exercise of an Option under the
Plans, then the Company shall make prompt application for such stock exchange's
approval of the listing of such shares on such stock exchange, at the sole
expense of the Company.
(b) In no event shall the Company be obligated to agree to any conditions which
it deems unacceptable as a prerequisite to obtaining such registration,
qualification and/or stock exchange approval. The inability of the Company to
obtain from any regulatory agency and/or stock exchange the authorization
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any shares of its stock hereunder shall relieve the Company of any liability
in respect of the non-issuance or sale of such stock as to which such requisite
authorization shall not have been obtained.
(c) Options granted under the Plans shall be conditioned upon the Company
obtaining any required regulatory permit authorizing the Company to issue such
Options.
15. Adjustments Upon Changes in Capitalization
If the outstanding shares of Common Stock of the Company are increased,
decreased, changed into or exchanged for a different number or kind of shares
of the Company through reorganization, recapitalization, reclassification,
stock dividend, stock split or reverse stock split, upon proper authorization
of the Board an appropriate and proportionate adjustment shall be made in the
number or kind of shares, and the per-share option price thereof, which may be
issued in the aggregate and to individual Optionees under these Plans upon
exercise of Options granted under the Plans; provided, however, that no such
adjustment need be made if, upon the advice of counsel, the Board determines
that such adjustment may result in the receipt of federally taxable income to
holders of Options granted hereunder or the holders of Common Stock or other
classes of the Company's securities.
7
<PAGE>
16. Representations and Warranties
As a condition to the granting and the exercise of any portion of an Option,
the Company may require the person receiving or exercising such Option to
make any representation and/or warranty to the Company as may, in the judgment
of counsel to the Company, be required under any applicable law or regulation,
including but not limited to a representation and warranty that the Option
and/or shares are being acquired only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required under the Securities Act of
1933 or any other applicable law, regulation or rule of any governmental agency.
17. No Enlargement of Employee Rights
These Plans are purely voluntary on the part of the Company, and while the
Company hopes to continue them indefinitely, the continuance of the Plans shall
not be deemed to constitute a contract between the Company and any employee,
or to be consideration for or a condition of the employment of any employee.
Nothing contained in the Plans shall be deemed to give any employee the right
to be retained in the employ of the Company or to interfere with the right of
the Company to discharge or retire any employee thereof at any time. No
employee shall have the right to or interest in Options authorized hereunder
prior to the grant of such an Option to such employee, and upon such grant he
shall have only such rights and interests as are expressly provided herein,
subject, however, to all applicable provisions of the Company's Certificate
of Incorporation and Bylaws, as the same may be amended from time to time.
18. Privileges of Stock Ownership
No person entitled to exercise any Option granted under the Plans shall have
any of the rights or privileges of a stockholder of the Company in respect of
any shares of Common Stock issuable upon exercise of such Option until a
certificate representing such shares shall have been issued. No adjustments
shall be made for dividends or other rights for which the record date is prior
to the date of issuance of such certificate, except as provided in Section 15.
19. Legends on Options and Stock Certificates
Each Stock Option Agreement and each certificate representing shares of Common
Stock acquired upon exercise of an Option shall be endorsed with all legends,
if any, required by applicable securities laws to be placed on the Stock
Option Agreement and/or certificate.
20. Availability of Plans
A copy of these Plans shall be delivered to the Secretary of the Company and
shall be shown by the Secretary to any eligible person making reasonable
inquiry concerning the Plans.
21. Applicable Law
These Plans shall be governed by and construed in accordance with the laws of
the State of Georgia.
8
<PAGE>
IN WITNESS WHEREOF, pursuant to the due authorization and adoption of these
Plans by the Board on May 29, 1986, the Company has caused these Plans to be
duly executed by its duly authorized officers, effective as of the date of
such Board adoption.
SOUTHERN BANCORP, INC.
BY:
----------------------------------
President
ATTEST:
------------------------------
Secretary
9
<PAGE>
MATERIAL PROVISIONS OF THE
HERITAGE BANCSHARES, INC. EMPLOYEES'
NON-QUALIFIED STOCK OPTION PLAN
General
The Non-Qualified Plan was adopted by the Board of
Directors of Heritage on October 15, 1986, and approved by a
majority vote of its shareholders at Heritage's annual
meeting in March, 1987. The Incentive Plan was adopted by
the Board of Directors of Heritage on November 10, 1983 as
amended and restated on October 15, 1986, and approved by a
majority vote of its shareholders at Heritage's annual
meeting in March, 1987. The purposes of the Plans were to
secure to Heritage and its shareholders the advantages of
the incentive inherent in stock ownership by its employees
and to provide them with a proprietary interest in and a
greater concern for the welfare of Heritage and an incentive
to continue their employment with Heritage. In conjunction
with the acquisition of Heritage, the Company agreed to
assume the outstanding options granted pursuant to the Plans
in order to maintain these advantages of ownership by the
employees.
Pursuant to Section 3.12 of the Acquisition
Agreement, the Plans were terminated and the Company assumed
the rights and obligations of Heritage under each then
existing and outstanding option to purchase shares of
Heritage granted pursuant to such Plans ("Existing
Options"). As a result of the assumption by the Company of
the Existing Options, each holder of an Existing Option is
entitled to acquire the largest whole number of shares of
Common Stock determined by multiplying the number of shares
of common stock of Heritage covered by each Existing Option
existing immediately prior to the closing of the merger by
2.921 (the merger exchange ratio) at a price per share equal
to the price per share then specified in such Existing
Option divided by 2.921. The number of shares and option
prices are both subject to appropriate adjustment in the
event of any stock dividend, split up or other
recapitalization.
The Existing Options assumed by the Company and for
which options to purchase Company Common Stock have been
substituted (the "Options") were issued pursuant to the
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<PAGE>
Incentive Plan and the Non-qualified Plan. The Incentive
Plan provided for the granting of options intended to
qualify as incentive stock options ("Incentive Options")
within the meaning of Internal Revenue Code (Section Symbol) 422(A) (b).
The Non-qualified Plan provided for the granting of options
not intended to so qualify ("Non-qualified Options").
Unless specified otherwise, the description in this
Prospectus relates to both the Incentive and the Non-
qualified Plan.
A maximum of 360,762 shares of the Company's Common
Stock (subject to adjustment for stock dividends or other
recapitalizations) are available for issue upon the exercise
of the options and no additional options will be granted
pursuant to the Plans. The shares will be issued out of
authorized and unissued shares of Common Stock of the
Company or transferred from available treasury stock.
The Plans are not subject to any provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA"),
nor is it subject to Section 401 of the Internal Revenue
Code of 1986, as amended (the "Code").
A summary of the more important provisions of the
Plans is set forth below. This summary does not purport to
be complete and reference to the full text of the Plans
should be made for further information. Copies of the Plans
will be made available to holders of options under the Plans
upon written request addressed to Edward B. Grimball,
Corporate Secretary, Bank South Corporation, 55 Marietta
Street, N.W., Atlanta, Georgia 30303.
Administration
Pursuant to the Acquisition Agreement, the Company
has assumed the responsibility for administering the
Plans. The Plans are administered by the Compensation
Committee of the Board of Directors of the Company (the
"Committee"). The Committee is bound to follow the terms
and conditions of each of the Plans. The members of the
Committee are appointed by and serve at the pleasure of the
Board of Directors of the Company. All decisions and
determinations of the Committee in the administration of the
Plan and on all questions concerning the Plan are final and
conclusive.
The present members of the Committee and their
positions with the Company and addresses are:
-8-
<PAGE>
Name Position Address
Rawson Haverty, Director Haverty Furniture
Chairman Companies, Inc.
P.O. Box 54678
Civic Center Station
Atlanta, Georgia 30308
Lynn H. Johnston Director Life Insurance
Company of Georgia
Life of Georgia Corporate
Center
P.O. Box 105006
Atlanta, Georgia 30348-5006
Gene W. Milner Director The Milner Companies
3333 Peachtree Street
Suite 310
East Tower
Atlanta, Georgia 30328
Eligibility and Participation
Employees of Heritage and each of its subsidiaries
(corporations at least 50% of the voting capital stock of
which was owned directly or indirectly by Heritage and
subsidiaries of such corporations) were eligible for grants
of options under the Plans. Recipients under the Plans were
selected in the discretion of the committee administering
the Plan (the "Heritage Committee"), taking into account
such factors as the nature of services rendered by the
employee, the employee's potential contribution to the long-
term success of the Company and such other factors as the
committee deemed relevant. On November 19, 1987, a total of
11 employees were participating in the Non-Qualified Plan
and 3 employees were participating in the Incentive Plan.
Because the Plans were terminated pursuant to the Acquisi-
tion Agreement, no additional options will be granted
pursuant to the Plans.
Terms of Grant and Exercise of Stock Options
The Plans provide for both incentive stock options
("Incentive Options"), as defined in Section 422A of the
Code, and nonqualified options ("Nonqualified Options").
The Heritage Committee determined the type of option
granted. The following information relates to both types of
options unless otherwise specified.
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<PAGE>
General. All options were granted in quantities
determined at the discretion of the Heritage Committee.
Full payment of the option price has to be made when an
option is exercised. The purchase price may be paid in cash
or in such other form as the Committee may approve,
including shares of Common Stock valued at their fair market
value on the date of exercise. The proceeds received by the
Company from the sales of the shares under the Plans will be
used for general corporate purposes.
Options granted under the Plans will be exer-
cisable, in whole or in part, by the option holder upon such
terms and conditions as may be determined by the Committee;
provided that options will not be exercisable later than 10
years from the date of grant, except in the case of certain
Incentive Options. See "Additional Requirements for Incen-
tive Options."
Options may be exercised only while the option
holder is an employee of the Company or one of its subsi-
diaries or during one of the following periods: (i) the
three month period following the date on which option holder
ceases to be an employee of the company if the option
holder's employment with the company was terminated other
than voluntarily or for cause as defined in the Plan; (ii)
the three month period following retirement under any
retirement plan of the Company; and (iii) the one year
period following the date on which the option holder ceases
to be an employee of the Company if the option holder has a
total and permanent disability. Provided, however, that
options may be exercised during such periods only if the
remaining term for exercise includes such periods.
Additional Requirements for Incentive Options. The
Incentive Plan established additional terms for Incentive
Options which, if the conditions are met, will qualify for
favorable tax treatment under Section 422A of the Code. See
"Description of the Stock Option Plan - Federal Income Tax
Effects." For Incentive Options granted prior to January 1,
1987, an option holder may exercise his or her Incentive
Options only in the order in which granted and the aggregate
Fair Market Value of Common Stock subject to such options
granted in any calendar year may not exceed $100,000 (or
such larger amount as may be permitted under applicable
law).
Further, if an Incentive Option was granted to an
employee of the Company who owns 10 percent or more of the
combined voting power of all shares of stock of the Company,
the option price per share must be at least 110 percent of
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<PAGE>
the Fair Market Value of a share of Common Stock on the date
of grant and the option may be exercisable for only five
years.
Assignment of Interest
Holders of options may not sell, assign, transfer
or hypothecate their rights thereunder to any person, except
in the event of the death of the holder in which case the
rights granted may be transferred by will or by the laws of
descent and distribution. To the extent permitted by law, a
holder's rights shall not be subject to liens or claims
against him.
Voting of Stock
A holder of an option will have no voting or other
rights in any shares of the Common Stock that are subject to
the option until such shares have been issued and delivered
to the holder pursuant to the exercise of such option.
Neither will the grant of any right pursuant to either of
the Plans confer upon any recipient thereof any rights of
employment with the Company or affect the right of the Com-
pany to terminate the employment of the holder at any time.
Adjustment of Shares
The Committee may in its discretion adjust the
number of shares subject to stock options under the Plans,
the purchase price per share and the aggregate number of
shares available for issue under the Plans in the event of
any stock dividend issued by the Company, recapitalization
of the Company's capital structure or exchange of the out-
standing shares of Common Stock for shares of another class
or company.
Outstanding Stock Options
The following outstanding options were issued
pursuant to the Incentive Plan on the date and for the price
stated below.
Original Converted
Heritage Common Stock Amounts Company Common Stock Amounts
Number of Number of
Date Shares Option Price Shares Option Price
March 14, 1984 3,000 $30.00 8,763 $10.27
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<PAGE>
The following outstanding options were issued
pursuant to the Non-Qualified Plan on the date and for the
price stated below.
<TABLE>
<CAPTION>
Original Converted
Heritage Common Stock Amounts Company Common Stock Amounts
Number of Number of
Date Shares Option Price Shares Option Price
<S> <C> <C> <C> <C>
March 14, 1984 6,666 $ 33.00 19,472 $ 11.30
March 14, 1984 43,000 $ 14.00 125,603 $ 4.79
October 15, 1986 31,920 $ 30.00 93,238 $ 10.27
October 15, 1986 32,920 $ 32.50 96,160 $ 11.13
April 15, 1987 6,000 $ 35.00 17,526 $ 11.98
8,763
------
360,762
</TABLE>
Expenses
The Company pays the administrative costs of the
Plans, including the expenses of the Committee, all costs of
registering the shares of Common Stock under the Plans with
the Securities and Exchange Commission, and issuing and
delivering the shares subject to the Plans.
Federal Income Tax Effects
Nonqualified Options. An Optionee did not realize
taxable income when a Nonqualified Option was granted to
him. Upon the exercise of a Nonqualified Option, however,
the Optionee will recognize income to the extent that the
fair market value of the Common Stock on the date the
Nonqualified Option is exercised exceeds the option price.
Any such gain is taxed in the same manner as ordinary income
in the year the Nonqualified Option is exercised. Any gain
recognized upon the disposition of the shares of stock
obtained by exercise of a Nonqualified Option will be taxed
in the same manner as capital gain income. The capital gain
tax rates are currently the same as the ordinary income tax
rates.
The Company did not experience any tax consequences
upon the grant of a Nonqualified Option, but will be
entitled to take an income tax deduction equal to the amount
the Optionee includes in income (if any) when the Option is
exercised.
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<PAGE>
Incentive Stock Options. An Optionee will not
realize taxable income from the grant or exercise of an
Incentive Stock Option. However, upon disposition of the
shares of stock obtained through the exercise of an
Incentive Stock Option, the Optionee will be taxed on the
gain, if any, on the shares of stock. The amount of gain
which the Optionee must recognize is equal to the amount by
which the value of the common stock on the date of sale
exceeds the option price. Any such gain will be taxed in
the same manner as capital gain income. The capital gain
tax rates are currently the same as the ordinary income tax
rates.
To qualify for the special tax treatment afforded
Incentive Stock Options, the Optionee must hold the common
stock obtained upon exercise of the Incentive Stock Option
for at least two years from the date the option was
granted. If the Optionee sells the stock before the two
year holding period expires, the Optionee must recognize
income equal to the lesser of the amount by which the fair
market value of the stock exceeds the Option price, or the
amount by which the amount realized on the disposition
exceeds the Option price. The Optionee must hold the common
stock obtained upon the exercise of the Incentive Stock
Option for at least one year in order for the recognized
gain to be taxed in the same manner as capital gain income.
If the Optionee holds the Common Stock for at least
two years from the date of exercise of the option, the
Company will not be entitled to any income tax deduction as
a result of the issuance of the shares pursuant to the
exercise of an Incentive Stock Option. However, if the
optionee sells the shares before the two-year holding period
is met, the Company will be entitled to take an income tax
deduction equal to the amount of income recognized by the
Optionee as a result of the sale.
Restrictions on Resale
Persons who are not affiliates of the Company may
resell stock acquired upon exercise of options issued under
the Plans without compliance with the requirements of Rule
144. Resales of such stock by persons who may be considered
"affiliates" of the Company, which may include directors and
ten percent shareholders of the Company, may be sold only in
compliance with all of the provisions of Rule 144 other than
the two-year holding period requirement, or pursuant to a
separate registration for the sale of such shares. In
general, with respect to shares acquired by affiliates pur-
suant to the Plans, under Rule 144 an affiliate (and persons
-13-
<PAGE>
whose shares are aggregated with such affiliate) is entitled
to sell within any three-month period a number of shares
(including shares received other than pursuant to the Plan)
that does not exceed the greater of one percent of the then
outstanding shares of the Company's Common Stock (approxi-
mately 241,130 shares based on outstanding shares at October
31, 1987) or the average weekly trading volume in the over-
the-counter market during the four full calendar weeks
preceding the sale.
LEGAL MATTERS
The validity of the shares of Common Stock offered
hereby will be passed upon for the Company by Kilpatrick &
Cody, Suite 3100, 100 Peachtree Street, Atlanta, Georgia
30043, counsel to the Company. Barry Phillips, a director
of the Company, is a partner of Kilpatrick & Cody, and, as
of November 18, 1987, partners and associates in that firm
who worked on the registration statement for the shares
offered hereby owned beneficially an aggregate of approxi-
mately 12,062 shares of the Company's Common Stock.
EXPERTS
The financial statements of Bank South Corporation
incorporated in this Prospectus and Registration Statement
by reference to the Annual Report on Form lO-K of Bank South
Corporation for the year ended December 31, 1986, have been
so incorporated in reliance on the report of Price
Waterhouse, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
The consolidated financial statements of Bank South
Corporation and subsidiaries for the two years ended
December 31, 1985, which are incorporated by reference in
this Prospectus and Registration Statement, have been
examined by Ernst & Whinney, independent accountants, as
indicated in their report thereon which is included in the
Annual Report on Form lO-K for the year ended December 31,
1986, as amended. The consolidated financial statements
examined by Ernst & Whinney, have been incorporated herein
by reference in reliance on their report given upon their
authority as experts in accounting and auditing.
-14-
<PAGE>
BANK SOUTH CORPORATION
KEY EMPLOYEE STOCK OPTION PLAN (1992)
<PAGE>
Introduction
The purpose of the Plan is to promote the long-term
success of Bank South Corporation and its subsidiaries by
providing financial incentives to key employees who are in
positions to make significant contributions toward such success.
The Plan is designed to attract individuals of outstanding
ability to employment with Bank South Corporation and its
subsidiaries, to encourage key employees to acquire a proprietary
interest in Bank South Corporation and to continue their
employment with Bank South Corporation or its subsidiaries, and
to render superior performance during such employment.
This Plan replaces the Company's Stock Option Plan (the
"Prior Plan") which was established on June 17, 1982, and under
which no options may be granted after June 16, 1992. This Plan
shall become effective on June 17, 1992. The options granted
under the Prior Plan shall remain subject to, and shall be
exercisable in accordance with, the terms and conditions of the
Prior Plan and the applicable Option Agreements. Any options
granted under this Plan shall be subject solely to the provisions
of this Plan.
<PAGE>
Table of Contents
Page
ARTICLE I Definitions; Maximum Shares Limitation;
Administration; Eligibility 1
1.1 Definitions 1
1.2 Maximum Shares Limitation 6
1.3 Administration of the Plan 7
1.4 Eligibility for Awards 10
1.5 Effective Date and Duration of Plan 10
ARTICLE II Stock Options 11
2.1 Grant of Options 11
2.2 Option Requirements 11
2.3 Incentive Stock Option Requirements 14
ARTICLE III Stock Appreciation Rights 16
3.1 Grant of Stock Appreciation Rights 16
3.2 Stock Appreciation Rights Requirements 17
ARTICLE IV General Provisions 18
4.1 Adjustment Provisions 18
4.2 Additional Conditions 19
4.3 No Rights as Shareholder or to
Employment 20
4.4 Legal Restrictions 20
4.5 Rights Unaffected 21
4.6 Withholding Taxes 22
4.7 Choice of Law 22
4.8 Amendment, Suspension and
Termination of Plan 23
<PAGE>
ARTICLE I
DEFINITIONS; MAXIMUM SHARES
LIMITATION; ADMINISTRATION; ELIGIBILITY
1.1 Definitions
Unless the context clearly indicates otherwise, for purposes
of this Plan the following terms have the respective
meanings set forth below:
(a) "Bank South Corporation" means Bank South Corporation,
a Georgia corporation, and any successor thereto.
(b) "Board of Directors" means the Board of Directors of
Bank South Corporation.
(c) "Change in Control" means:
(1) the acquisition, directly or indirectly, by any
"person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934,
as amended) within any twelve month period, of
securities of Bank South Corporation representing
an aggregate of 25% or more of the combined voting
power of Bank South Corporation's then outstanding
securities; or
<PAGE>
(2) during any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors, cease for any
reason to constitute at least a majority thereof,
unless the election of each new director was
approved in advance by a vote of at least a
majority of the directors then still in office who
were directors at the beginning of the period.
The Committee may expand or restrict the events which
constitute a "Change in Control" for purposes of all or
a portion of the Options covered by a particular Option
Agreement.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means the Compensation Committee of the
Board of Directors, which Committee shall be composed
of not less than three members of the Board of
Directors who are not employees of Bank South
Corporation or its affiliates and who are not, at the
time they are exercising discretion in administering
the Plan, eligible, and have not at any time within one
year prior thereto been eligible, for selection as a
person to whom Options or Stock Appreciation Rights may
2
<PAGE>
be granted pursuant to this Plan or any other similar
plan of Bank South Corporation or its affiliates.
(f) "Common Stock" means the common stock of Bank South
Corporation, par value $5.00 per share, or such other
class of share or other securities to which the
provisions of the Plan may be applicable by reason of
the operation of Section 4.1 hereof.
(g) "Company" means Bank South Corporation, and also means
any corporation of which a majority of the voting
capital stock is owned directly or indirectly by Bank
South Corporation or any of its subsidiaries which is a
Company hereunder, and any other corporation designated
by the Committee as being a Company hereunder (but only
during the period of such ownership or designation).
(h) "Fair Market Value" of a share of Common Stock on any
particular date means (1) if the Common Stock is not
then traded on a national stock exchange, the mean
between the closing composite inter-dealer "bid" and
"ask" prices for Common Stock, as quoted by NASDAQ (i)
on such date, or (ii) if no "bid" and "ask" prices are
quoted on such date, then on the next preceding date on
which such prices were quoted; or (2) if the Common
Stock is then traded on a national stock exchange, the
closing price on such date of a share of the Common
3
<PAGE>
Stock as traded on the largest stock exchange on which
it is then traded.
(i) "Grant Date," as used with respect to a particular
Option or Stock Appreciation Right, means the date as
of which such Option or Stock Appreciation Right is
granted by the Committee pursuant to the Plan.
(j) "Grantee" means the key employee to whom an Option or
Stock Appreciation Right is granted by the Committee
pursuant to the Plan.
(k) "Incentive Stock Option" means an Option that qualifies
as an incentive stock option as described in Section
422 of the Code.
(l) "Option" means an Option granted by the Committee
pursuant to Article II to purchase shares of Common
Stock, which shall be designated at the time of grant
as either an Incentive Stock Option or a Supplemental
Stock Option, as provided in Section 2.1 hereof.
(m) "Option Agreement" means the agreement between Bank
South Corporation and a Grantee under which the Grantee
is granted an Option and/or Stock Appreciation Rights
pursuant to the Plan.
4
<PAGE>
(n) "Option Period" means, with respect to any Option or
Stock Appreciation Right granted hereunder, the period
beginning on the Grant Date and ending at such time not
later than the tenth annual anniversary of the Grant
Date, as the Committee, in its sole discretion, shall
determine and during which the Option or Stock
Appreciation Right may be exercised.
(o) "Plan" means the Bank South Corporation Key Employee
Stock Option Plan (1992), as set forth herein and as
amended from time to time.
(p) "Retirement," as applied to a Grantee, means the
Grantee's termination of employment in a manner which
qualifies the Grantee to receive immediately payable
retirement benefits under the Bank South Corporation
Employees' Retirement Plan and Trust, under the
successor or replacement of such Retirement Plan if it
is then no longer in effect, or under any other
retirement plan maintained or adopted by Bank South
Corporation which is determined by the Committee to be
the functional equivalent of such Retirement Plan.
(q) "Stock Appreciation Right" means a right granted
pursuant to Article III hereof by the Committee, in
conjunction with an Option, to receive payment equal to
any increase in the Fair Market Value of a share of
5
<PAGE>
Common Stock from the Grant Date to the date of
exercise of such right, in lieu of exercise of the
Option for such share.
(r) "Supplemental Stock Option" means any Option granted
under this Plan, other than an Incentive Stock Option.
(s) "Tax Equalization Payment" means a cash payment which
may be payable to a Grantee under the terms of Section
1.3(a) (4) upon exercise of a Supplemental Stock Option
granted under this Plan.
(t) "Total and Permanent Disability," as applied to a
Grantee, means that the Grantee (1) has established to
the satisfaction of the Committee that the Grantee is
unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or
which has lasted or can be expected to last for a
continuous period of not less than 12 months and (2)
has satisfied any requirement imposed by the Committee
in regard to evidence of such Total and Permanent
Disability.
1.2 Maximum Shares Limitation
(a) The maximum number of shares of Common Stock with
respect to which Options and Stock Appreciation Rights
6
<PAGE>
may be granted under this Plan shall not exceed 335,779
shares of Common Stock, subject to possible adjustments
in accordance with Section 4.1.
(b) Any shares of Common Stock to be delivered by Bank
South Corporation upon the exercise of Options or Stock
Appreciation Rights shall, at the discretion of the
Board of Directors, be issued from Bank South
Corporation's authorized but unissued shares of Common
Stock or be transferred from any available treasury
stock.
(c) In the event that any Option or Stock Appreciation
Right expires or otherwise terminates prior to being
fully exercised the Committee may grant new Options
and Stock Appreciation Rights hereunder to any eligible
Grantee for the shares with respect to which the
expired or terminated Option or Stock Appreciation
Rights were not exercised.
1.3 Administration of the Plan
(a) The Plan shall be administered by the Committee which
shall have the discretionary authority:
(1) To determine those key employees of the Company to
whom, and the times at which, Options and Stock
7
<PAGE>
Appreciation Rights shall be granted and the
number of shares of Common Stock to be subject to
such Option and Stock Appreciation Rights, taking
into consideration the nature of the services
rendered (or to be rendered) by the particular
employee, the employee's potential contribution to
the long-term success of the Company, and such
other factors as the Committee in its discretion
shall deem relevant;
(2) To interpret and construe the provisions of the
Plan and to establish rules and regulations
relating to it;
(3) To prescribe the terms and conditions of the
Option Agreements for the grant of Options and
Stock Appreciation Rights (which need not be
identical) in accordance and consistent with the
requirements of the Plan;
(4) To determine, in its sole discretion, whether any
Grantee of a Supplemental Stock Option shall be
entitled to a Tax Equalization Payment. The
amount of the Tax Equalization Payment shall be a
percentage of the amount the Grantee includes in
income (as described below) as a result of the
exercise of a Supplemental Stock Option granted
8
<PAGE>
under the terms of this Plan. This percentage
shall be determined by the Committee and shall
reflect (i) the individual income tax rate that
will apply to the amount the Grantee includes in
income, (ii) the corporate income tax rate for the
year the option is exercised, and (iii) the
relationship between such individual income tax
rate and corporate income tax rate. For purposes
hereof, the amount the Grantee includes in income
shall be determined by subtracting the aggregate
price Grantee paid for the shares of Common Stock
upon exercise of the Option from the aggregate
Fair Market Value of such shares of Common Stock
on the date of the exercise; and
(5) To make all other determinations necessary or
advisable to administer the Plan in a proper and
effective manner.
(b) All decisions and determinations of the Committee in
the administration of the Plan and on questions or
other matters concerning the Plan or any Option or
Stock Appreciation Right shall be final, conclusive and
binding on all persons, including, without limitation,
Bank South Corporation, the Company, the shareholders
and directors of Bank South Corporation and any persons
having any interest in any Options or Stock
9
<PAGE>
Appreciation Rights which may be granted under the
Plan. The Committee shall be entitled to rely in
reaching its decisions on the advice of counsel (who
may be counsel to Bank South Corporation).
1.4 Eligibility for Awards
The Committee shall in accordance with Article II and III
designate from time to time the key employees of the Company
who are to be granted Options and Stock Appreciation Rights.
In no event may a member of the Committee or any Director
who is not an employee of the Company be granted an Option
or Stock Appreciation Right under this Plan.
1.5 Effective Date and Duration of Plan
The Plan shall become effective on June 17, 1992; provided,
that any grant of Options or Stock Appreciation Rights under
the Plan prior to approval of the Plan by the shareholders
of Bank South Corporation is subject to such shareholder
approval within twelve months of adoption of the Plan by the
Board of Directors. Unless previously terminated by the
Board of Directors, the Plan (but not any then outstanding
Options or Stock Appreciation Rights which have not yet
expired or otherwise terminated) shall terminate on the
fifth (5th) annual anniversary of its adoption by the Board
of Directors.
10
<PAGE>
ARTICLE II
STOCK OPTIONS
2.1 Grant of Options
The Committee may from time to time, subject to the
provisions of the Plan, grant Options to key employees of
the Company under appropriate Option Agreements to purchase
shares of Common Stock up to the maximum number of shares of
Common Stock set forth in Section 1.2(a). The Committee may
designate any Option (or portion thereof) which satisfies
the requirements of Section 2.3 hereof as an Incentive Stock
Option. Any portion of an Option that is not designated as
an Incentive Stock Option (or that otherwise fails to be
treated as an Incentive Stock Option) shall be a
Supplemental Stock Option. A Supplemental Stock Option must
satisfy the requirements of Section 2.2 hereof, but shall
not be subject to the requirements of Section 2.3.
2.2 Option Requirements
(a) An Option shall be evidenced by an Option Agreement
specifying the number of shares of Common Stock that
may be purchased by its exercise and containing such
other terms and conditions consistent with the Plan as
the Committee shall determine to be applicable to that
particular Option.
11
<PAGE>
(b) No Option shall be granted under the Plan on or after
the fifth (5th) annual anniversary of the date upon
which the Plan became effective.
(c) No Option shall be exercisable during the first twelve
months commencing on the Grant Date (A) except as may
be specifically allowed by the Committee in the event
of a merger, acquisition or other extraordinary
transaction in which Bank South Corporation is not the
surviving entity, (B) in the event of a Change in
Control (as defined in Section 1.1(c)), or (C) in the
event the Committee in its sole discretion, otherwise
determines and specifies in the applicable Option
Agreement that the Option is exercisable during the
first twelve months following its Grant Date.
(d) An Option shall expire by its terms at the expiration
of the Option Period and shall not be exercisable
thereafter. The Committee may provide in the Option
Agreement for the expiration or termination of the
Option prior to the expiration of the Option Period,
upon the occurrence of any event specified by the
Committee.
(e) The option price per share of Common Stock shall be not
less than the Fair Market Value of a share of Common
Stock on the Grant Date.
12
<PAGE>
(f) An Option shall not be transferrable other than by will
or the laws of descent and distribution. During the
lifetime of the Grantee, an Option shall be exercisable
only by the Grantee, or if the Grantee is disabled, by
his duly appointed guardian or legal representative.
Upon his death, but only to the extent that such Option
is otherwise exercisable hereunder, an Option my be
exercised by the Grantee's legal representative or by a
person who receives the right to exercise such Option
under the Grantee's will or by the applicable laws of
descent and distribution.
(g) Notwithstanding the Option Period applicable to an
Option granted hereunder and except as otherwise
provided in the Option Agreement, such Option, to the
extent that it has not previously been exercised, shall
terminate upon the earliest to occur of: (1) the
expiration of the applicable Option Period as set forth
in the Option Agreement granting such Option, (2) the
expiration of three months after the Grantee's
Retirement, (3) the expiration of one year after the
Grantee ceases to be an employee of the Company due to
Total and Permanent Disability, (4) the expiration of
two years after the Grantee ceases to be an employee of
the Company due to the death of the Grantee or such
later time as may be approved by the Committee, or (5)
13
<PAGE>
the date that a Grantee terminates employment with the
Company for any reason other than Retirement, Total and
Permanent Disability, or death.
(h) A person electing to exercise an Option shall give
written notice of such election to Bank South
Corporation, in such form as the Committee may require,
accompanied by payment in the manner determined by the
Committee, of the full purchase price of the shares of
Common Stock for which the election is made. Payment
of the purchase price shall be made in cash or in such
other form as the Committee amy approve, including
shares of Common Stock valued at their Fair Market
Value on the date of exercise of the Option.
(i) The exercise of any number of Stock Appreciation Rights
granted under an Option Agreement shall result in a
simultaneous corresponding reduction in the number of
shares of Common Stock then available for purchase by
exercise of the related Option.
2.3 Incentive Stock Option Requirements
(a) An Option designated by the Committee as an Incentive
Stock Option is intended to qualify as an "incentive
stock option" within the meaning of Section 422(b) of
the Code, and shall satisfy, in addition to the
14
<PAGE>
conditions of Section 2.2 above, the conditions set
forth in this Section 2.3.
(b) An Incentive Stock Option shall not be granted to an
individual who, on the Grant Date, owns stock
possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the
Company, unless the Committee provides in the Option
Agreement with any such individual that the option
price per share of Common Stock will not be less than
110% of the Fair Market Value of a share of Common
Stock on the Grant Date and that the Option Period will
not extend beyond five years from the Grant Date.
(c) The aggregate Fair Market Value (determined on the
Grant Date) of the shares of Common Stock with respect
to which such Incentive Stock Options are exercisable
for the first time by a Grantee during any calendar
year (under all such plans maintained by Bank South
Corporation or its affiliates) shall not exceed
$100,000.
15
<PAGE>
ARTICLE III
STOCK APPRECIATION RIGHTS
3.1 Grant of Stock Appreciation Rights
(a) In conjunction with any Option granted hereunder, the
Committee may, in its discretion, grant a Stock
Appreciation Right with respect to each share of Common
Stock which may be purchased by the exercise of such
Option.
(b) Upon exercise of a Stock Appreciation Right, Bank South
Corporation shall pay the amount by which the Fair
Market Value of a share of Common Stock on the date of
exercise exceeds the Fair Market Value of a share of
Common Stock on the Grant Date, but only to the extent
that such amount does not exceed 200% of the Fair
Market Value of a share of Common Stock on the Grant
Date. A Stock Appreciation Right may not be exercised
unless the Fair Market Value of a share of Common Stock
on the date of exercise exceeds the Fair Market Value
of a share of Common Stock on the Grant Date.
(c) Payment upon exercise of a Stock Appreciation Right may
be made, in the sole discretion of the Committee, in
(1) cash, (2) in shares of Common Stock valued at Fair
Market Value on the date of exercise, or (3) partly in
cash and partly in shares of Common Stock.
16
<PAGE>
3.2 Stock Appreciation Rights Requirements
(a) Stock Appreciation Rights shall be granted under and
evidenced by the Option Agreement under which the
related Option is granted, containing such terms and
conditions consistent with the Plan as the Committee
shall determine, and shall be exercisable to the extent
allowed under such terms and conditions.
(b) Stock Appreciation Rights granted in relation to an
Option (1) shall be exercisable only to the extent and
only when the Option is exercisable, (2) shall expire
or otherwise terminate simultaneously with the
expiration or termination of the related Option, (3)
shall be transferable only when the related Option is
transferable and under the same conditions, (4) shall
be exercised by the Grantee giving written notice of
such exercise to Bank South Corporation, in such form
as the Committee may require, and (5) shall be reduced
upon each exercise of the related Option by the number
of Stock Appreciation Rights which corresponds to the
number of shares of Common Stock purchased pursuant to
such exercise.
17
<PAGE>
ARTICLE IV
GENERAL PROVISIONS
4.1 Adjustment Provisions
(a) In the event of:
(1) any dividend payable in shares of Common Stock,
(2) any recapitalization, reclassification, split-up
or consolidation of, or other change in, the
Common Stock, or
(3) an exchange of the outstanding shares of Common
Stock, in connection with a merger, consolidation
or other reorganization of or involving Bank South
Corporation or a sale by Bank South Corporation of
all or a portion of its assets, for a different
number or class of shares of stock or other
securities of Bank South Corporation or for shares
of the stock or other securities of any other corporation,
then the Committee shall, in such manner as it shall
determine in its sole discretion, appropriately adjust
the number and class of shares or other securities
which shall be subject to Options and Stock
18
<PAGE>
Appreciation Rights and/or the purchase price per share
which must be paid thereafter upon exercise of any
Option and which will be used to determine the amount
which any Grantee would receive upon exercise
thereafter of Stock Appreciation Rights. Any such
adjustments made by the Committee shall be final,
conclusive and binding upon all persons, including,
without limitation, Bank South Corporation, the
Company, the shareholders and directors of Bank South
Corporation and any persons having any interest in any
Options or Stock Appreciation Rights which may be
granted under the Plan.
(b) Except as provided in paragraph (a) immediately above,
issuance by Bank South Corporation of shares of stock
of any class or securities convertible into shares of
stock of any class shall not affect the Options or
Stock Appreciation Rights.
4.2 Additional Conditions
Any shares of Common Stock issued or transferred under any
provision of the Plan may be issued or transferred subject
too such conditions, in addition to those specifically provided
in the Plan, as the Committee or Bank South
Corporation may impose.
19
<PAGE>
4.3 No Rights as Shareholder or to Employment
No Grantee or any other person authorized to purchase Common
Stock upon exercise of an Option shall have any interest in
or shareholder rights with respect to any shares of Common
Stock which are subject to any Option or Stock Appreciation
Rights until such shares have been issued and delivered to
the Grantee or any such person pursuant to the exercise of
such Option. Furthermore, the Plan shall not confer upon
any Grantee any rights of employment with the Company,
including, without limitation, any right to continue in the
employ of the Company, or affect the right of the Company to
terminate the employment of a Grantee at any time, with or
without cause.
4.4 Legal Restrictions
If in the opinion of legal counsel for Bank South
Corporation the issuance or sale of any shares of Common
Stock pursuant to the exercise of an Option would not be
lawful for any reason, including without limitation the
inability of Bank South Corporation to obtain from any
governmental authority or regulatory body having
jurisdiction the authority deemed necessary by such counsel
for such issuance or sale, Bank South Corporation shall not
be obligated to issue or sell any Common Stock pursuant to
the exercise of an Option to a Grantee or any other
authorized person unless a registration statement that
complies with the provisions of the Securities Act of 1933,
20
<PAGE>
as amended (the "Act"), in respect of such shares is in
effect at the time thereof, or other appropriate action has
been taken under and pursuant to the terms and provisions of
the Act, or Bank South Corporation receives evidence
satisfactory to such counsel that the issuance and sale of
such shares, in the absence of an effective registration
statement or other appropriate action, would not constitute
a violation of the Act or any applicable state securities
law. Bank South Corporation agrees to use its best efforts
to make, in the opinion of such counsel the issuance or
sale of shares of Common Stock pursuant to the exercise of
an Option granted hereunder lawful.
4.5 Rights Unaffected
The existence of the Options and Stock Appreciation Rights
shall not affect: the right or power of Bank South
Corporation or its shareholders to make adjustments,
recapitalizations, reorganizations or other changes in Bank
South Corporation's capital structure or its business; any
issue of bonds, debentures, preferred or prior preference
stocks affecting the Common Stock or the rights thereof; the
dissolution or liquidation of Bank South Corporation, or
sale or transfer of any part of its assets or business; or
any other corporate act, whether of a similar character or
otherwise.
21
<PAGE>
4.6 Withholding Taxes
As a condition of exercise of an Option or Stock
Appreciation Right, Bank South Corporation may, in its sole
discretion, withhold or require the Grantee to pay or
reimburse Bank South Corporation for any taxes which Bank
South Corporation determines are required to be withheld in
connection with the grant or any exercise of an Option or
Stock Appreciation Right.
4.7 Choice of Law
The validity, interpretation and administration of the Plan
and of any rules, regulations, determinations or decisions
made thereunder, and the rights of any and all persons
having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance
with the laws of the State of Georgia.
Without limiting the generality of the foregoing, the period
within which any action in connection with the Plan must be
commenced shall be governed by the Laws of the State of
Georgia, without regard to the place where the act or
omission complained of took place, the residence of any
party to such action, or the place where the action may be
brought or maintained.
22
<PAGE>
4.8 Amendment, Suspension and Termination of Plan
The Plan may, from time to time, be terminated, suspended or
amended by the Board of Directors in such respects as it
shall deem advisable in order (i) that the Incentive Stock
Options granted hereunder shall be "incentive stock options"
as such term is defined in Section 422 of the Code, or (ii)
to conform to any change in any law or regulation governing
the Plan, or the Options or Stock Appreciation Rights
granted hereunder, including, without limitation, amendments
to comply with the reporting and liability provisions of
Section 16 of the Securities Exchange Act of 1934; provided,
however, that no such amendment shall change the following:
(a) The maximum aggregate number of shares for which
Options may be granted under the Plan, except as
required under any adjustment pursuant to Section 4.1
hereof;
(b) The Option exercise price, with the exception of any
change in such price required as a result of any
adjustment pursuant to Section 4.1 hereof, and with the
further exception of changes in determining Fair Market
Value of shares of Common Stock to conform with any
then applicable provision of the Code or regulations
promulgated thereunder;
23
<PAGE>
(c) The maximum Option Period during which Options or Stock
Appreciation Rights may be exercised;
(d) The maximum amount which may be paid upon exercise of a
Stock Appreciation Right;
(e) The termination date of the Plan in any manner which
would extend such date; or
(f) The requirements as to eligibility for participation in
the Plan in any material respect.
Notwithstanding any other provision herein contained, the Plan
shall terminate and all Options and Stock Appreciation Right
previously granted shall terminate, in the event and on the date
of liquidation or dissolution of Bank South Corporation.
AS APPROVED BY THE BOARD OF DIRECTORS OF BANK SOUTH CORPORATION
on the 13 day of February, 1992.
BANK SOUTH CORPORATION
By: signature of Ralph E. Hutchins, Jr.
Title: Sr. Executive Vice President
24
<PAGE>
BANKSOUTH CORPORATION
1993 EQUITY INCENTIVE PLAN
(Effective January 1, 1993, as amended April 20, 1995)
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BANKSOUTH CORPORATION
1993 EQUITY INCENTIVE PLAN
(Effective January 1, 1993, as amended April 20, 1995)
Article 1. Establishment, Purpose, and Duration
1.1 Establishment of the Plan
Bank South Corporation, a Georgia corporation (hereinafter referred to as the
"Company"), hereby establishes an incentive compensation plan to be known as
the "Bank South Corporation 1993 Equity Incentive Plan" (hereinafter referred
to as the "Plan"), as set forth in this document. The Plan permits the grant
of Nonqualified Stock Options, Incentive Stock Options, and Performance Units.
Upon approval by the Board of Directors of the Company, subject to ratification
by an affirmative vote of a majority of Shares at the Company's April 15, 1993
annual shareholders' meeting, the Plan shall become effective as of January
1, 1993 (the "Effective Date"), and shall remain in effect as provided in
Section 1.3 herein. Awards may be granted prior to shareholder ratification of
the Plan; provided, however, that in the event shareholder approval of the Plan
is not obtained, all outstanding Awards shall become null and void.
1.2 Purpose of the Plan
The purpose of the Plan is to promote the success, and enhances the value, of
the Company by linking the personal interests of Participants to those of
Company shareholders, and by providing Participants with an incentive for
outstanding performance.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants upon
judgment, interest, and special effort the successful conduct of its operation
largely is dependent.
1.3 Duration of the Plan
Subject to approval by the Board of Directors of the Company and ratification
by the shareholders of the Company, the Plan shall commence on the Effective
Date, as described in Section 1.1 herein, and shall remain in effect, subject
to the right of the Board of Directors to terminate the Plan at any time
pursuant to Article 11 herein, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after January 1, 2003.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word
is capitalized:
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(a) "Award" means individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options or Performance Units.
(b) "Award Agreement" means an agreement entered into by each Participant and
the Company, setting forth the terms and provisions applicable to Awards
granted to Participants under this Plan.
(c) "Board" or "Board of Directors" means the Board of Directors of the
Company.
(d) "Cause" means: (i) willful or gross misconduct on the part of a Participant
that is materially and demonstrably detrimental to the Company; or (ii) the
commission by a Participant of one or more acts which constitute an indictable
crime under United States Federal, state, or local law. "Cause" under either
(i) or (ii) shall be determined in good faith by the Committee.
(e) "Change in Control" will be deemed to have occurred as of the first day
that any one or more of the following conditions has been satisfied:
(i) the acquisition, directly or indirectly, by any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) within any twelve
(12) month period of securities of the Company representing an aggregate
of twenty-five percent (25%) or more of the combined voting power of the
Company's then outstanding securities, or
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, cease for any reason to
constitute at least a majority thereof, unless the election of each new
director was approved in advance by a vote of at least a majority of the
directors then still in office who were directors at the beginning of the
period; or
(iii) consummation of (a) a merger, consolidation or other business combination
of the Company with any other "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) or affiliate thereof, other than a merger,
consolidation or business combination which would result in the outstanding
common stock of the Company immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into common stock of the
surviving entity or a parent or affiliate thereof) at least sixty percent (60%)
of the outstanding common stock of the Company or such surviving entity or
parent or affiliate thereof outstanding immediately after such merger,
consolidation or business combination, or (b) a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets, or
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(iv) the occurrence of any other event or circumstance which is not covered by
(i) through (iii) above which the Board determines affects control of the
Company and adopts a resolution that such event or circumstances constitutes a
Change in Control.
After the earlier of (i) a Change in Control, (ii) the public announcement of a
transaction that, if consummated, would constitute a Change in Control, or
(iii) the Board of Directors learning of a proposal for a transaction that, if
consummated, would constitute a Change in Control, the Plan may not be amended
to restrict the events which constitute a Change in Control for purposes of
this Plan. However, if the transaction that would have constituted a Change in
Control is subsequently withdrawn or abandoned, the definition may then be
amended.
(f) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(g) "Committee" means the committee, as specified in Article 3, appointed by
the Board to administer the Plan with respect to grants of Awards.
(h) "Company" means Bank South Corporation, a Georgia corporation, or any
successor thereto as provided in Article 14 herein.
(i) "Director" means any individual who is a member of the Board of Directors
of the Company.
(j) "Disability" means a permanent and total disability within the meaning of
Code Section 22(e)(3), as determined by the Committee in good faith, upon
receipt of sufficient competent medical advice from one or more individuals,
selected by the Committee, who are qualified to give professional medical
advice.
(k) "Employee" means any full-time employee of the Company or of the Company's
Subsidiaries. Directors who are not otherwise employed by the Company shall
not be considered Employees under this Plan.
(l) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor act thereto.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
(n) "Fair Market Value" means the average of the highest and lowest quoted
selling prices for Shares on the relevant date, or (if there were no sales on
such date) the weighted average of the means between the highest and lowest
quoted selling prices on the nearest day before and the nearest day after the
relevant date, as determined by the Committee.
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(o) "Incentive Stock Option" or "ISO" means an option to purchase Shares,
granted under Article 6 herein, which is designated as an Incentive Stock
Option and is intended to meet the requirements of Section 422 of the Code.
(p) "Insider" shall mean an Employee who is, on the relevant date, an officer
or Director of the Company, as defined under Rule 16(a) of the Exchange Act.
(q) "Noninsider" means an Employee who is not, on the relevant date, an
Insider.
(r) "Nonqualified Stock Option" or "NQSO" means an option to purchase Shares,
granted under Article 6 herein, which is not intended to be an Incentive Stock
Option.
(s) "Option" means an Incentive Stock Option or a Nonqualified Stock Option.
(t) "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option, as determined by the Committee.
(u) "Participant" means an Employee of the Company who has outstanding an Award
granted under the Plan.
(v) "Performance Unit" means an Award granted to a Participant pursuant to
Article 7 herein.
(w) "Retirement" shall mean early or normal retirement under the Bank South
Corporation Employees' Retirement Plan and Trust (or its successor retirement
plan).
(x) "Shares" means the shares of common stock of the Company.
(y) "Subsidiary" means any corporation in which the Company owns directly, or
indirectly through subsidiaries, at least fifty percent (50%) of the total
combined voting power of all classes of stock, or any other entity (including
but not limited to, partnerships and joint ventures) in which the Company owns
at least fifty percent (50%) of the combined equity thereof.
(z) "Window Period" means the period beginning on the third business day
following the date of public release of the Company's quarterly financial
information and ending on the twelfth business day following such date.
Article 3. Administration
3.1 The Committee
The Plan shall be administered by the Compensation Committee of the Board, or
by any other Committee appointed by the Board consisting of not less than two
(2) Directors
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who are not Employees. The members of the Committee shall be
appointed from time to time by, and shall serve at the discretion of, the Board
of Directors.
The Committee shall be comprised solely of Directors who are eligible to
administer the Plan pursuant to Rule 16b-3 under the Exchange Act and Section
162(m) of the Code, and the rules and regulations thereunder. However, if for
any reason the Committee does not qualify to administer the Plan, as
contemplated by Rule 16b-3 of the Exchange Act or Section 162(m) of the Code
and the rules and regulations thereunder, the Board of Directors may appoint
a new Committee so as to comply with Rule 16b-3 and Section 162(m) of the Code,
and the rules and regulations thereunder.
3.2 Authority of the Committee
The Committee shall have full power except as limited by law or by the
Articles of Incorporation or Bylaws of the Company, and subject to the
provisions herein, to determine the size and types of Awards; to determine
the terms and conditions of such Awards in a manner consistent with the Plan;
to construe and interpret the Plan and any agreement or instrument entered into
under the Plan; to establish, amend, or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 11 herein)
to amend the terms and conditions of any outstanding Award to the extent such
terms and conditions are within the discretion of the Committee as provided
in the Plan. Further, the Committee shall make all other determinations which
may be necessary or advisable for the administration of the Plan. As permitted
by law, the Committee may delegate its authorities as identified hereunder.
3.3 Decisions Binding
All determinations and decisions made by the Committee pursuant to the
provisions of the Plan and all related orders or resolutions of the Board of
Directors shall be final, conclusive, and binding on all persons, including
the Company, its stockholders, Employees, Participants, and their estates
and beneficiaries.
Article 4. Shares Subject to the Plan
4.1 Number of Shares
Subject to adjustment as provided in Section 4.3 herein, the total number of
Shares available for grant under the Plan may not exceed two million
(2,000,000), and the maximum number of Shares that may be the subject of
Options granted to any one individual in any consecutive three-year period
is one hundred fifty thousand (150,000) Shares. These two million Shares may
be either authorized but unissued or reacquired Shares.
The following rules will apply for purposes of the determination of the number
of Shares available for grant under the Plan:
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(a) While an Award is outstanding, it shall be counted against the authorized
pool of Shares, regardless of its vested status.
(b) The grant of an Option shall reduce the Shares available for grant under
the Plan by the number of Shares subject to such Award.
(c) The payment of a Performance Unit in the form of a Share or Shares shall
reduce the Shares available for grant under the Plan at the time of payment.
(d) To the extent that an Award is settled in cash rather than in Shares, the
authorized Share pool shall be credited with the appropriate number of Shares
represented by the cash settlement of the Award, as determined at the sole
discretion of the Committee (subject to the limitation set forth in Section
4.2 herein).
4.2 Lapsed Awards
If any Award granted under this Plan is canceled, terminates, expires, or
lapses for any reason, any Shares subject to such Award again shall be
available for the grant of an Award under the Plan. However, in the event that
prior to the Award's cancellation, termination, expiration, or lapse, the
holder of the Award at any time received one or more "benefits of ownership"
pursuant to such Award (as defined by the Securities and Exchange Commission,
pursuant to any rule or interpretation promulgated under Section 16 of the
Exchange Act), the Shares subject to such Award shall not be made available for
regrant under the Plan.
4.3 Adjustments in Authorized Shares
In the event of any merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock dividend, split-up, Share combination, or other
change in the corporate structure of the Company affecting the Shares, such
adjustment shall be made in the number and class of Shares which may be
delivered under the Plan, and in the number and class of and/or price of Shares
subject to outstanding Options granted, and Performance Units paid in Shares,
under the Plan, as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of
rights; and provided that the number of Shares subject to any Award shall
always be a whole number.
Article 5. Eligibility and Participation
5.1 Eligibility
Persons eligible to participate in this Plan include all full-time, active
Employees of the Company and its Subsidiaries, as determined by the Committee,
including Employees who are members of the Board, but excluding Directors who
are not Employees.
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5.2 Actual Participation
Subject to the provisions of the Plan, the Committee may, from time to time,
select from all eligible Employees those to whom Awards shall be granted and
shall determine the nature and amount of each Award.
Article 6. Stock Options
6.1 Grant of Options
Subject to the terms and provisions of the Plan, Options may be granted to
Employees at any time and from time to time as shall be determined by the
Committee. The Committee shall have discretion in determining the number of
Shares subject to Options granted to each Participant. The Committee may
grant ISO's, NQSOs, or a combination thereof. The Committee may delegate its
duties to the Chief Executive Officer as regards Noninsiders.
6.2 Award Agreement
Each Option grant shall be evidenced by an Award Agreement that shall specify
the Option Price, the duration of the Option, the number of Shares to which the
Option pertains, and such other provisions as the Committee shall determine.
The Option Agreement also shall specify whether the Option is intended to be an
ISO within the meaning of Section 422 of the Code, or a NQSO whose grant is
intended not to fall under the Code provisions of Section 422.
6.3 Option Price
The Option Price for each grant of an Option shall be determined by the
Committee; provided that the Option Price shall not be less than one hundred
percent (100%) of the Fair Market Value of a Share on the date the Option is
granted.
6.4 Duration of Options
Each Option shall expire at such time as the Committee shall determine at the
time of grant; provided, however, that no Option shall be exercisable later
than the tenth (10th) anniversary date of its grant.
6.5 Exercise of Options
Options granted under the Plan shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall in each
instance approve, which need not be the same for each grant or for each
Participant.
6.6 Payment
Options shall be exercised by the delivery of a written notice of exercise to
the Secretary of the Company, setting forth the number of Shares with respect
to which the Option is to be exercised, accompanied by full payment for the
Shares.
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The Option Price upon exercise of any Option shall be payable to the Company
in full either: (a) in cash or its equivalent, or (b) by tendering previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Shares that are tendered
must have been held by the Participant for at least six(6) months prior to
their tender to satisfy the Option Price), (c) through foregone income based on
an arrangement with the Company, or (d) by a combination of (a), (b) and/or
(c).
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.
As soon as practicable after receipt of a written notification of exercise and
full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.7 Restrictions on Share Transferability
The Committee may impose such restrictions on any Shares acquired pursuant to
the exercise of an Option under the Plan, as it may deem advisable, including,
without limitation, restrictions under applicable Federal securities laws,
under the requirements of any stock exchange or market upon which such Shares
are then listed and/or traded, and under any blue sky or state securities
laws applicable to such Shares.
6.8 Termination of Employment Due to Death, Disability, or Retirement
(a) TERMINATION BY DEATH. In the event the employment of a Participant is
terminated by reason of death, all outstanding Options granted to that
Participant shall immediately vest one hundred percent (100%), and shall
remain exercisable at any time prior to their expiration date, or for one (1)
year after the date of death, whichever period is shorter, by such person as
shall have been named as the Participant's beneficiary under Article 8.
(b) TERMINATION BY DISABILITY. In the event the employment of a Participant is
terminated by reason of Disability, all outstanding Options granted to that
Participant shall immediately vest one hundred percent (100%) as of the date
the Committee determines the definition of Disability to have been satisfied,
and shall remain exercisable at any time prior to their expiration date, or
for one (1) year after the date that the Committee determines the definition
of Disability to have been satisfied, whichever period is shorter.
(c) TERMINATION BY RETIREMENT. In the event the employment of a Participant is
terminated by reason of Retirement, all outstanding Options granted to that
Participant shall immediately vest one hundred percent (100%), and shall
remain exercisable at any time prior to their expiration date.
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(d) EMPLOYMENT TERMINATION FOLLOWED BY DEATH. In the event that a Participant's
employment terminates by reason of Disability or Retirement, and within the
exercise period following such termination the Participant dies, then the
remaining exercise period under outstanding Options shall equal the shorter of:
(i) one (1) year following death; or (ii) the remaining portion of the exercise
period. Such Options shall be exercisable by such person or persons who shall
have been named as the Participant's beneficiary under Article 8.
(e) EXERCISE LIMITATIONS ON ISOS. In the case of ISOs, the tax treatment
prescribed under Section 422 of the Code may not be available if the Options
are not exercised within the Section 422 prescribed time periods after each of
the various types of employment termination.
6.9 Termination of Employment for Other Reason
If the employment of a Participant shall terminate for any reason other than
the reasons set forth in Section 6.8 (and other than for Cause), all Options
held by the Participant which are not vested as of the effective date of
employment termination immediately shall be forfeited to the Company (and,
subject to Section 4.2, shall once again become available for grant under the
Plan). Options that are vested as of the effective date of employment
termination may be exercised by the Participant within the period beginning on
the effective date of employment termination, and ending 30 days after such
date.
If the employment of a Participant is terminated by the Company for Cause, all
outstanding Options held by the Participant immediately shall be forfeited to
the Company and no additional exercise period shall be allowed, regardless of
the vested status of the Options.
6.10 Accelerated Vesting and Extended Exercisability Following Termination
Regardless of the provisions regarding the exercisability of Options that are
not vested as of the date of employment termination, and the provisions
regarding the length of the exercise period following employment termination,
as specified in Section 6.8 and 6.9 above, the Committee (or, in the case of
Options held by Noninsiders, the Committee or the CEO), may in its or his sole
discretion, subject to the limitation of Section 11.2 below, provide for
accelerated Option vesting and/or for an extended period of exercisability
following termination, upon such terms and provisions as it or he deems
appropriate; provided however, that the period of exercisabilty shall not
extend beyond the period specified in Section 6.4 herein.
6.11 Nontransferability of Options
No Option granted under the Plan may be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order
as defined in the Code or ERISA. Further, all Options granted to a Participant
under the Plan shall be exercisable during his or her lifetime only by such
Participant.
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Article 7. Performance Units
7.1 Grant of Performance Units
Subject to the terms and provisions of the Plan, the Committee, at any time
and from time to time, may grant Performance Units to eligible Employees in
such amounts as the Committee shall determine. Each Performance Unit shall
represent a dollar amount to be specified by the Committee. The determination
of the value of a Performance Unit will be made by the Committee.
7.2 Number of Performance Units Earned
The Committee shall set performance goals in its discretion which, depending
on the extent to which they are met, will determine the ultimate number or the
Performance Units earned by the Participant. The time period during which the
performance goals must be met shall be called a "Performance Period," and also
is to be determined by the Committee.
7.3 Payment of Performance Units
After a Performance Period has ended, the holder of a Performance Unit shall be
entitled to receive the value thereof as determined by the original designation
of the value of a Performance Unit, and the extent to which performance goals
established by the Committee have been met.
7.4 Form and Timing of Payment
Payment under Section 7.3 above shall be made in cash, stock, or a combination
thereof as determined by the Committee. Payment may be made in lump sum or
installments as prescribed by the Committee. If any payment is to be made on a
deferred basis, the Committee may provide for the payment of dividend
equivalents or interest during the deferral period.
7.5 Voting Rights and Dividends
Participants are not entitled to vote Performance Units that represent Shares,
or to receive dividends thereon, until actual receipt of Shares earned by the
Participant (if any) after the applicable Performance Period established by
the Committee has been completed, or upon earlier satisfaction of any other
conditions as specified by the Committee.
7.6 Termination of Employment Due to Death, Disability, or Retirement
In the case of Disability or Retirement, the holder of a Performance Unit shall
receive prorata payment based on the number of months' service during the
Performance Period, but based on the achievement of performance goals during
the entire Performance Period. Payment shall be made at the time payments are
made to participants who did not terminate service during the Performance
Period.
In the case of death, this provision will also apply, except that payment for
all performance units held by the Participant for all open Performance Periods
shall be based on the
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performance goals achieved as of the end of the first Performance Period to
expire following the Participant's death.
7.7 Termination of Employment for Other Reason
In the event that a Participant terminates employment with the Company for any
reason other than death, Disability, or Retirement, all Performance Units for
Performance Periods that have not yet ended shall be forfeited. In the case of
a Performance Period that ended prior to termination but for which payout has
not yet been made, the Participant will receive the payout as though termination
had not yet occurred.
7.8 Nontransferability
Except as provided in this Article 7, the Performance Units granted herein may
not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until actual receipt of cash or Shares earned by the Participant
after the applicable Performance Period established by the Committee has been
completed, or upon earlier satisfaction of any other conditions, as specified
by the Committee in its sole discretion. However, in no event may any
Performance Unit granted under the Plan be paid out in Shares prior to six (6)
months following the date of its grant.
At time of grant, the Committee may provide that payment amounts will carry
additional performance requirements or requirements for continued employment.
All rights with respect to Performance Units granted to a Participant under the
Plan shall be available during his or her lifetime only to such Participant.
7.9 Performance Units qualifying as "Performance-Based Compensation" under
Section 162(m) of the Code.
The Committee may, but shall not be required to, conform Performance Units to
the parameters set forth in this Section 7.9. To the extent not inconsistent
with this Section 7.9, the other provisions of Article 7 and the Plan shall
apply to Performance Units granted hereunder.
The parameters set forth below have been approved by the shareholders of the
Company to qualify as "performance-based" compensation under Section 162 (m)
of the Code. As used herein the term "Covered Employee" shall have the meaning
given such term in Section 162(m) of the Code and the rules and regulations
thereunder.
The Committee shall within 90 days of the beginning of the applicable
Performance Period, or any earlier or later date to the extent required or
permitted by Code Section 162(m) without causing the award to fail to qualify
as performance-based compensation, select the Participant to receive
Performance Units for the Performance Period in question and adopt in writing
each of the following: (i) a Target Award for each Participant expressed in
terms of a number of units, each worth $1, to be earned at target performance,
(ii) a performance measure based on the Company's compound annual total
shareholder return (stock price increase plus dividends) over the Performance
Period, (iii) a performance measure based on the percentile ranking of the
Company's compound
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annual total shareholder return as compared to a peer group of similar
institutions selected by the Committee for such period, and (iv) a mathematical
matrix combining the two performance measures as a method of determining the
percent of the Target Award to be earned by the Participant with respect to
the applicable Performance Period, including, in each case, a threshold
performance level below which no award will be earned and a maximum award
level. No Performance Unit award shall be paid to a Participant unless the
relevant performance criteria for the Performance Period are met or exceeded.
In no event shall the value of Performance Units paid to a Covered Employee
under this Section 7.9 with respect to any one Performance Period exceed
$2,000,000. Except as may be permitted under Section 162(m) of the Code or the
rules and regulations thereunder, once established, neither the Target Award
nor the performance criteria for Performance Units applicable to a Covered
Employee pursuant to Section 7.9 of Plan may be amended.
Article 8. Beneficiary Designation
Each Participant under the Plan may, from time to time, name any beneficiary
or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke
all prior designations by the same Participant, shall be in a form prescribed
by the Company, and will be effective only when filed by the Participant in
writing with the Secretary of the Company or his designee during the
Participant's lifetime. In the absence of any such designation, or in the
event the designated beneficiary does not survive the Participant, the
Participant's beneficiary under this Plan shall be the Participant's
beneficiary under the Company's group life insurance program.
Article 9. Rights of Employees
9.1 Employment
Nothing in the Plan shall interfere with or limit in any way the right of the
Company to terminate any Participant's employment at any time, nor confer upon
any Participant any right to continue in the employ of the Company.
For purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Subsidiaries (or between Subsidiaries) shall not be
deemed a termination of employment.
9.2 Participation
No Employee shall have the right to be selected to receive an Award under this
Plan, or, having been so selected, to be selected to receive a future Award
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Article 10. Change in Control
Upon the occurrence of a Change In Control, unless otherwise specifically
prohibited by the terms of Section 11 herein:
(a) Any and all Options granted hereunder shall become immediately exercisable;
(b) All open Performance Periods for Performance Units shall end, and within
120 days after the occurrence of a Change in Control, the value of Performance
Units granted for those Performance Periods (calculated as set forth in the
following sentence) will be paid in cash to the Participant. The amount to be
paid to the Participant in the event of a Change in Control shall be calculated
by measuring total shareholder return over the Performance Period in question,
using as the ending measure (both as to the Company and the comparison peer
group) the average performance results over the 20 trading days prior to the
earlier of (i) the announcement of the Change in Control or (ii) the
announcement of an agreement in principle, or the signing of a definitive
agreement, to enter into a transaction that would, if consummated, constitute
a Change in Control (the "Announcement Date"), and including all dividends paid
through the Announcement Date. In addition, any restrictions on sale of shares
received in connection with prior Performance Periods will lapse.
Article 11. Amendment, Modification, and Termination
11.1 Amendment, Modification, and Termination
With the approval of the Board, at any time and from time to time, the
Committee may terminate, amend, or modify the Plan. However, without the
approval of the stockholders of the Company (as may be required by the Code,
by the insider trading rules of Section 16 of the Exchange Act, by any
national securities exchange or system on which the Shares are then listed or
reported, or by a regulatory body having jurisdiction with respect hereto),
no such termination, amendment, or modification may:
(a) Materially increase the total number of Shares which may be issued under
this Plan, except as provided in Section 4.3 herein; or
(b) Materially modify the eligibility requirements for participation in this
Plan; or
(c) Materially increase the benefits accruing to Insiders under the Plan.
In the event of a Change in Control, the public announcement of a transaction
that, if consummated, would constitute a Change in Control, or the Board of
Directors learning of a proposal for a transaction that, if consummated, would
constitute a Change in Control, termination, amendment or modification of this
Plan or an Award, either of which could adversely affect an Award in any
material way, shall require the consent of the Participant (or the
Participant's Beneficiary in the event of the Participant's death). Such
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consent shall not be required if the transaction that would have constituted a
Change in Control is subsequently withdrawn or abandoned.
11.2 Awards Previously Granted
No termination, amendment, or modification of the Plan shall, without the
written consent of the affected Participant, adversely affect in any material
way (i) any Option previously granted under the Plan or (ii) any Performance
Unit for which the Performance Period applicable to such Performance Unit has
ended.
The Committee may, without the consent of the affected Participant, terminate,
amend or modify the Plan with respect to any Performance Unit prior to the
close of the Performance Period applicable to such Performance Unit. If the
Plan is terminated, however, the affected Participant shall receive a prorata
payment based on the number of months' service during the Performance Period,
but based on the achievement of performance goals as of the date of Plan's
termination. Payment shall be made as soon as administratively possible
following the Plan's termination. If the Plan is amended or modified with
respect to a Performance Unit, such amendment or modification may not, without
the consent of the affected Participant, reduce the potential payout under such
Performance Unit below that amount which the Participant would have received
assuming the Plan was terminated as of the date of the amendment or
modification.
In the event of the Participant's death, the Participant's consent, where
required, must be given by the Participant's Beneficiary.
Article 12. Withholding
12.1 Tax Withholding
The Company shall have the power and the right to deduct or withhold, or
require a Participant to remit to the Company, an amount sufficient to
satisfy Federal, state, and local taxes (including the Participant's FICA
obligation) required by law to be withheld with respect to any taxable event
arising or as a result of this Plan.
12.2 Share Withholding
With respect to withholding required upon the exercise of Options, upon the
payout of Performance Units in the form of Shares, or upon any other taxable
event hereunder, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date the
tax is to be determined equal to the minimum statutory total tax which could
be imposed on the transaction. All elections shall be irrevocable, made in
writing, signed by the Participant, and elections by Insiders shall
additionally comply with the applicable requirement set forth in (a) or (b)
of this Section 12.2.
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(a) STOCK OPTIONS. The Participant must either:
(i) Deliver written notice of the stock withholding election to the Committee
at least six (6) months prior to the date specified by the Participant on which
the exercise of the Option is to occur; or
(ii) Make the stock withholding election in connection with an exercise of an
Option that occurs during a Window Period.
(b) PERFORMANCE UNITS. The Participant must either:
(i) Deliver written notice of the stock withholding election to the Committee
at least six (6) months prior to the date on which the taxable event relating
to the Award is scheduled to occur; or
(ii) Make the stock withholding election during a Window Period which occurs
prior to the scheduled taxable event relating to the Performance Unit (for this
purpose, an election may be made prior to such a Window Period, provided that
it becomes effective during a Window Period occurring prior to the applicable
taxable event).
Article 13. Indemnification
Each person who is or was a member of the Committee, or of the Board, shall be
indemnified and held harmless by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him or
her in connection with or resulting from any claim, action, suit, or proceeding
to which he or she may be a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan unless arising out
of such person's willful or gross misconduct. Such indemnification shall
include any and all amounts paid by him or her in settlement thereof, with the
Company's approval, or paid by him or her in satisfaction of any judgment in
any such action, suit, or proceeding against him or her, provided he or she
shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his
or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may
be entitled under the Company's Articles of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
Article 14. Successors
All obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such
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successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the
business and/or assets of the Company.
Article 15. Legal Construction
15.1 Gender and Number
Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine; the plural shall include
the singular and the singular shall include the plural.
15.2 Severability
In the event any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect the
remaining parts of Plan, and the Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.
15.3 Requirements of Law
The granting of Awards and the issuance of Shares under the Plan
shall be subject to all applicable laws, rules, and regulations, and
to such approvals by any governmental agencies or national securities
exchanges as may be required.
Notwithstanding any other provision set forth in the Plan, if
required by the then-current Section 16 of the Exchange Act, any
"derivative security" or "equity security" granted pursuant to the
Plan to an Insider may not be sold or transferred for at least six
(6) months after the date of grant of such Award, and if an equity
security is acquired by an Insider pursuant to the exercise or
conversion of a derivative security within six (6) months of the
grant of the derivative security hereunder, such equity security may
not be sold or transferred until the expiration of such six-month
period. The terms "equity security" and "derivative security" shall
have the meanings ascribed to them in the then-current Rule 16(a)
under the Exchange Act.
15.4 Securities Law Compliance
With respect to Insiders, transactions under this Plan are intended
to comply with all applicable conditions or Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision
of the plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
15.5 Foreign Employees
To the extent permissible under applicable law, the Company may
make grants of Awards to eligible Employees who are employed
in locations outside of the United States. The Committee shall
have the authority to modify the terms of Awards granted to such
Employees in order to ensure compliance with applicable local and
national law.
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15.6 Governing Law
To the extent not preempted by Federal law (or foreign law in the case
of grants to Employees who are not United States residents), the Plan,
and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Georgia.
15.7 Regulatory Compliance
It is the intention that any and all provisions of this Plan be consistent
and comply with applicable laws or regulations enacted or promulgated before
or after the execution or adoption of this Plan, and to the extent that any
such provision is inconsistent or in noncompliance with applicable laws or
regulations, the provision or portion thereof that is inconsistent or in
noncompliance will be deemed void.
IN WITNESS WHEREOF, Bank South Corporation has caused this document to
be executed as of the 20th day of April, 1995.
BANK SOUTH CORPORATION
By: ____________________
ATTEST:
By: _______________________
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1988 SUBSTITUTE STOCK OPTION PLAN
OF CHATTAHOOCHEE BANCORP, INC.
FOR THE 1987 STOCK OPTION PLAN
OF THE BUCKHEAD BANK
ARTICLE I
GENERAL
1.1 Purpose of the Plan.
The purpose of the 1988 Substitute Stock Option Plan of Chattahoochee
Bancorp, Inc. for the 1987 Stock Option Plan of The Buckhead Bank (the
"Plan") is (i) for Chattahoochee Bancorp, Inc. (the "Company") to assume
The Buckhead Bank 1987 Stock Option Plan (the "Former Plan"); (ii) for
the Company to assume all outstanding options and stock appreciation
rights granted under the Former Plan; (iii) to assist the Company and
The Buckhead Bank ("Buckhead") in securing and retaining key employees
of outstanding ability by making it possible to offer them an increased
incentive to join or continue in the service of the Company and Buckhead;
and (iv) to increase the key employees' efforts for the Company's and
Buckhead's welfare by participating in the ownership and growth of the Company.
1.2 Definitions
(a) "Acceleration Event" means any event which in the opinion of
the Board of Directors of the Company is likely to lead to changes in control
of share ownership of the Company, whether or not such change in control
actually occurs;
(b) "Board of Directors" or "Board" means the Board of Directors of the Company;
(c) "Code" means the Internal Revenue Code of 1986, as amended;
(d) "Common Stock" means common stock of the Company having a par value
of $1.00 per share.
(e) "Fair Market Value", so long as the Common Stock is not traded
on an established securities market, means the value determined by the
Board of Directors of the Committee (as hereinafter defined) taking into
account those factors affecting or reflecting value as it deems
relevant, including, but not limited to, recent sales prices, book
value, earnings, reasonably expected changes in book value or earnings,
and values of stock of banks similar to the Company. If the Common
Stock is traded in the over-the-counter market, fair market value means
the closing "asked" price of the shares in the over-the-counter market
<PAGE>
on the day on which such value is to be determined or, if such "asked"
price is not available, the last sales price on such day or, if no
shares were traded on such day, on the next preceding day on which the
shares were traded, as reported by the National Association of
Securities Dealers Automatic Quotation System (NASDAQ) or other national
quotation service. If the shares are listed on a National Securities
Exchange, "fair market value" means the closing price of the shares on
such National Securities Exchange on the day on which such value is to
be determined or, if no shares were traded on such day, on the next
preceding day on which shares were traded, as reported by National
Quotation Bureau, Inc. or other national quotation service;
(f) "Incentive Stock Option" means an option or Substituted Option
to purchase shares of Common Stock which is intended to qualify as an
incentive stock option as defined in Section 422A of the Code;
(g) "Key Employee" means any person, including officers and
directors, in the regular full-time employment of the Company or its
Subsidiaries who, is designated a Key Employee by the Committee referred
to in Section 1.3, and is or is expected to be primarily responsible for
the management, growth, or supervision of some part or all of the
business of the Company or its Subsidiaries. The power to determine who
is and who is not a Key Employee is reserved solely for the Committee;
(h) "Nonqualified Stock Option" means an option or Substituted
Option to purchase shares of Common Stock which is not intended to
qualify as an Incentive Stock Option as defined in Section 422A of the
Code;
(i) "Option" means an Incentive Stock Option or a Nonqualified Stock Option;
(j) "Optionee" means a Key Employee to whom an Option is granted
under the Plan;
(k) "Parent" means any corporation which qualifies as a parent of
a corporation under the definition of "parent corporation" contained in
Section 425(e) of the Code;
(l) "Stock Appreciation Right" shall have the meaning stated in Article IV
of the Plan;
(m) "Subsidiary" means any corporation which qualifies as a
subsidiary of a corporation under the definition of "subsidiary
corporation" contained in Section 425(f) of the Code;
(n) "Substituted Options" means an incentive stock option or
nonqualified stock option granted under the Former Plan and assumed by
the Company in accordance with Code Section 425 (see Section 1.4(b) of
the Plan);
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(o) "Term" means the period during which a particular Option may
be exercised as determined by the Committee and as provided in the
option agreement.
1.3 Administration of the Plan.
The Plan shall be administered by the Stock Option Committee (the
"Committee") appointed by the Board of Directors consisting of at least
three members from the Board of Directors. No person while a member of
the Committee shall be eligible to participate in the Plan. Subject to
the control of the Board, and without limiting the generality thereof,
Section 1.7 hereof, the Committee shall have the power to interpret and
apply the Plan and to make regulations for carrying out its purpose.
More particularly, the Committee shall determine which Key Employees
shall be granted Options under the Plan, the number of shares subject to
each Option, the price per share under each Option, the Term of each Option,
and any restrictions on the exercise of each Option. When
granting Options, the Committee shall designate the Option as either an
Incentive Stock Option or a Nonqualified Stock Option. The Committee
shall also designate whether the Option is granted with Stock
Appreciation Rights. Determinations by the Committee under the Plan
(including, without limitation, determinations of the person to receive
Options, the form, amount and timing of such Options, and the terms and
provisions of such Options and the agreements evidencing same) need not
be uniform and may be made by it selectively among persons who receive,
or are eligible to receive, Options under the Plan, whether or not such
persons are similarly situated.
1.4 Shares Subject to the Plan.
(a) The total number of shares that may be purchased pursuant to
Options or transferred pursuant to the exercise of Stock Appreciation
Rights under the Plan shall not exceed 200,000 shares of Common Stock.
Shares subject to the Options which terminate or expire prior to exercise
shall be available for future Options. Shares represented by
an unexercised Option surrendered upon an exercise of Stock Appreciation
Rights including, without duplication, any shares issued in payment of
any Stock Appreciation Rights, shall be deducted from the aggregate and
shall not be available for further Options hereunder. Shares issued
pursuant to the Plan may be either unissued shares of Common Stock or
reacquired shares of Common Stock held in treasury.
(b) Options and Stock Appreciation Rights have been issued under
the Former Plan prior to the Company's formation and subsequent merger
with the Chattahoochee Financial Corporation ("Chattahoochee") as
contemplated by the Agreement and Plan of Reorganization dated as of
July 15, 1988, by and among the Company, Buckhead and the Chattahoochee (the
"Reorganization"). Notwithstanding anything to the contrary in
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this Plan, all Options and Stock Appreciation Rights outstanding under
the Former Plan immediately prior to the Reorganization shall be assumed
by the Company. Substituted Options shall be issued for all Options and
Stock Appreciation Rights granted under the Former Plan in accordance with
the principles of Code Sections 425(a) and 425(h). Shares subject to such
Substituted Options shall be considered part of the 200,000
shares of Stock reserved for issuance under this Plan. In the event a
Substituted Option lapses, the shares subject to such lapsed Substituted
Option shall become available for further grants under this Plan.
1.5 Terms and Conditions of Options.
All Options shall be evidenced by agreements in such form as the
Committee shall approve from time to time subject to the provisions of
Article II or Article III, as appropriate, and the following provisions:
(a) Exercise Price. Except as provided in Section 3.1, the
exercise price of the Option shall not be less than the Fair Market
Value (as determined by the Committee) of the Common Stock at the
time the Option is granted.
(b) Exercise. The Committee shall determine whether the Option
shall be exercisable in full at any time during the Term or in
cumulative or noncumulative installments during the Term.
(c) Termination of Employment. An Optionee's Option shall expire
on the earlier of the expiration of (i) three months after the
termination of the Optionee's employment for any reason other than death
or disability (as defined in Section 422A(c)(7) of the Code), or (ii)
the Term specified in Section 2.1 or 3.1(a) as the case may be. In the
event of exercise of the Option after termination of employment the
Optionee may exercise the Option only with respect to the shares which
could have been purchased by the Optionee at the date of termination of
employment. However, the Committee may, but is not required to, waive
any requirements made pursuant to Section 1.5(b) so that some or all of
the shares subject to the Option may be exercised within the time
limitation described in this subsection. An Optionee's employment shall
be deemed to terminate on the last date for which he receives a regular
wage or salary payment.
(d) Death or Disability. Upon termination of an Optionee's
employment by reason of death or disability (as determined by the
Committee consistent with the definition of Section 422A(c)(7) of the
Code), the Option shall expire unless exercised upon the earlier of the
expiration of (i) 12 months of the date of such termination, or (ii) the
Term specified in Section 2.1 or 3.1(a) as the case may be. The
Optionee or his successor in interest, as the case may be, may exercise
the Option only as to the shares which could have been purchased by the
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Optionee at the date of his termination of employment. However, the
Committee may, but is not required to, waive any requirements made
pursuant to Section 1.5(b) so that some or all of the shares subject to
the Option may be exercised with the time limitations described in this
subsection.
(e) Payment. Payment for shares as to which an Option is
exercised shall be made in such manner and at such time or times as
shall be provided in the option agreement, including cash, Common Stock
of the Company which was previously acquired by the Optionee, or any
combination thereof. The Fair Market Value of the surrendered Common
Stock as of the date of exercise shall be determined in valuing Common
Stock used in payment for Options.
(f) Nontransferability. No Option granted under the Plan shall be
transferable other than by will or by the laws of descent and
distribution. During the lifetime of the Optionee, an Option shall be
exercisable only by the Optionee.
(g) Additional Provisions. Each option agreement may contain such
other terms and conditions not inconsistent with the provisions of the
Plan as the Committee may deem appropriate from time to time.
1.6 Stock Adjustments; Mergers.
Notwithstanding Section 1.4, in the event the outstanding shares
are increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Company or of any
other corporation by reason of any merger, sale of stock, consolidation,
liquidation, recapitalization, reclassification, stock split up,
combination of shares, or stock dividend, the total number of shares set
forth in Section 1.4 shall be proportionately and appropriately adjusted
by the Committee. If the Company continues in existence, (i) the number
and kind of shares that are subject to any Option and the option price
per share shall be proportionately and appropriately adjusted without
any change in the aggregate price to be paid therefor upon exercise of
the Option, and (ii) the Committee may make such adjustments in the
number and kind of Stock Appreciation Rights as it shall deem
appropriate in the circumstances. If the Company will not remain in
existence or substantially all of its voting Common Stock and Common
Stock will be purchased by a single purchaser or group of purchasers
acting together, then the Committee may (i) declare that all Options
and Stock Appreciation Rights shall terminate 30 days after the Committee
gives written notice to the Optionees of their immediate right to
exercise all Options and Stock Appreciation Rights then outstanding
(without regard to limitations on exercise otherwise contained in the
Options), or (ii) notify all Optionees that all Options and Stock
Appreciation Rights granted under the Plan shall apply with appropriate
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adjustments as determined by the Committee to the securities of the
successor corporation to which holders of the numbers of shares subject
to such Options and Stock Appreciation Rights would have been entitled,
or (iii) some combination of aspects of (i) and (ii). The determination
by the Committee as to the terms of any of the foregoing adjustments
shall be conclusive and binding. Any fractional shares resulting from
any of the foregoing adjustments under this section shall be disregarded
and eliminated.
1.7 Acceleration Event.
If an Acceleration Event occurs in the opinion of the Board of
Directors, based on circumstances known to it, the Board of Directors
may direct the Committee to declare that all Options and Stock
Appreciation Rights granted under the Plan shall become exercisable
immediately notwithstanding the provisions of the respective Option
agreements regarding exercisability.
1.8 Notification of Exercise.
Options shall be exercised by written notice directed to the Secretary
of the Company at the principal executive offices of the Company. Such
written notice shall be accompanied by any payment required pursuant to
Section 1.5(e). Exercise by an Optionee's heir or the representative of
his estate shall be accompanied by evidence of his authority to so set
in form reasonably satisfactory to the Company.
ARTICLE II
INCENTIVE STOCK OPTIONS
2.1 Terms of Incentive Stock Options.
Each Incentive Stock Option granted under the Plan shall be exercisable
only during a Term fixed by the Committee; provided, however, that the
Term shall end no later than 10 years after the date the Incentive Stock
Option is granted.
2.2 Limitation on Options.
The aggregate Fair Market Value of Common Stock (determined at the time
the Incentive Stock Option is granted) subject to Incentive Stock
Options granted to a Key Employee under all plans of the Key Employee's
employer corporation and its Parent or Subsidiary corporations and that
become exercisable for the first time by such Key Employee during any
calendar year may not exceed $100,000.
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2.3 Continued Employment.
Whether military, government or other service or other leave of absence
shall constitute a termination of employment shall be determined in each
case by the Committee at its discretion, and any determination by the
Committee shall be final and conclusive. A termination of employment
shall not occur where the Optionee transfers from the Company to one of
its Subsidiaries or transfers from a Subsidiary to the Company.
2.4 Special Rule for Ten Percent Shareholder.
If at the time an Incentive Stock Option is granted, an employee
owns stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of his employer corporation or of
its Parent or any of its Subsidiaries, as determined using the
attribution rules of Section 425(d) of the Code, then the terms of the
Incentive Stock Option shall specify that the option price shall be at
least 110% of the Fair Market Value of the stock subject to the
Incentive Stock Option and such Incentive Stock Option shall not be
exercisable after the expiration of five years from the date such
Incentive Stock Option is granted.
2.5 Interpretation.
In interpreting this Article II of the Plan and the provisions of
individual option agreements, the Committee and the Board shall be
governed by the principles and requirements of Sections 421, 422A and
425 of the Code, and applicable Treasury Regulations.
ARTICLE III
NONQUALIFIED STOCK OPTIONS
3.1 Terms and Conditions of Options.
In addition to the requirements of Section 1.5, Nonqualified Stock
Options shall be subject to the following provisions:
(a) Term. Each Nonqualified Stock Option granted under the Plan
shall be exercisable only during a Term fixed by the Committee.
(b) Termination of Employment. Notwithstanding the provisions of
Sections 1.5(c) and 1.5(d), the Stock Option Committee in its discretion
may provide, either upon the original grant of an Option or in an
amendment to an Incentive or Nonqualified Stock Option, that an Option
may be exercisable during a Term that does not expire upon the
expiration of three months following an Optionee's termination of
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employment (one year in the case of termination as a result of death or
disability), but in no event later than the Term specified in Section
3.1(a) above.
(c) Exercise Price. The Company may elect to grant Nonqualified
Stock Options at a price less than the Fair Market Value of the Common
Stock at the time the Option is granted but in no event less than the
par value of the Common Stock.
3.2 Section 83(b) Election.
The Company recognizes that certain persons who receive Nonqualified
Stock Options may be subject to restrictions regarding their right to
trade Common Stock under applicable securities laws. Such may cause
Optionee's exercising such Options not to be taxable under the
provisions of Section 83(c) of the Code. Accordingly, Optionees
exercising such Nonqualified Stock Options may consider making an
election to be taxed upon exercise of the Option under Section 83(b) of
the Code and to effect such election will file such election with the
Internal Revenue Service within thirty (30) days of exercise of the
Option and otherwise in accordance with applicable Treasury Regulations.
ARTICLE IV
STOCK APPRECIATION RIGHTS
4.1 Terms and Conditions of Stock Appreciation Rights.
Stock Appreciation Rights ("SAR") may be, but are not required to be,
granted by the Committee in connection with grant of an Option. All
SARs shall be in such form as the Committee may from time to time
determine and shall be subject to the following terms and conditions:
(a) Term and Exercise. An SAR shall be exercisable only (i) with
the approval of the Committee, (ii) during the Term of the Option to
which it relates, (iii) at such times as the Option to which it relates
is exercisable, and (iv) if the Fair Market Value of the Common Stock
subject to the Option surrendered (on the date surrendered) minus the
aggregate option price of the Common Stock subject to the Option
surrendered is a positive amount.
(b) Payment. In the event the Committee agrees to permit exercises
of the SAR, the Optionee shall surrender to the Company the right to
exercise the Option with respect to a specified number of shares as to
which the Option is then exercisable. In return, the Optionee shall
receive from the Company no more than an amount payable in cash and/or
in shares (as determined by the Committee after considering the request
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of the Optionee) equal to the difference between the Fair Market Value
of Common Stock as to which the Optionee has surrendered the Option and
the exercise price with respect thereto. In the event the Committee
determines to tender shares in full or partial payment of the SAR, the
number of shares to be issued to the Optionee shall be based on the Fair
Market Value of the shares as of the date of exercise of the SAR. No
fractional shares shall be issued to Optionees upon exercise of an SAR.
Instead, the Company shall pay the Optionee the value of such fractional
share based upon the Fair Market Value of a share on the date the SAR is
exercised.
(c) Nontransferability. An SAR granted under the Plan shall be
transferable only when the Option to which it relates is transferable.
4.2 Other Terms and Conditions.
Option agreements and reflecting Stock Appreciation Rights which are granted
under the Plan may contain such other conditions not inconsistent with
the provisions of the Plan as the Committee may deem appropriate from
time to time.
4.3 Notification of Request to Exercise.
The Optionee shall request the Committee's approval to exercise a Stock
Appreciation Right by written notice to the Secretary of the Company at
the principal executive offices of the Company. Such written notice
shall state the number of shares subject to the Option for which
approval of the exercise of the SAR is requested and the Optionee's
preferred form of payment of the SAR, as hereinafter provided. The
Optionee may indicate his or her preference to receive payment of the
SAR in cash or in Common Stock or in a combination thereof.
Notwithstanding anything to the contrary contained herein, the Committee
shall have absolute discretion in determining whether the request for
approval of the exercise of the SAR shall be approved and, if such
approval is given, whether payment shall be made in cash or Common Stock
or in a combination thereof.
Within 30 days after the delivery to the Secretary of the Optionee's
request to exercise the SAR as provided above, the Committee shall
inform the Optionee in writing of its determination by personal delivery
of such written determination to the Optionee or by mailing its written
determination to the Optionee by certified or registered mail, return
receipt requested. The Optionee must act on any approved exercise of an
SAR within 30 days after the date of such determination by the Committee
(or such longer period as may be permitted by the Committee) and in
accordance with the terms approved by the Committee. Exercise shall be
by written notice actually delivered, or mailed by certified or
registered mail, return receipt requested, to the Secretary of the
Company at the principal executive offices of the Company.
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4.4 Effect of Exercise.
Upon the exercise of a Stock Appreciation Right, the Option to which it
relates shall lapse with respect to the shares as to which the SAR is
exercised and such shares shall not be available for further grant of
Options.
ARTICLE V
ADDITIONAL PROVISIONS
5.1 Stockholder Approval.
The Plan shall be submitted for the approval of the stockholders of the
Company at the first annual meeting of stockholders held subsequent to
or coincident with the adoption of the Plan in all events within one
year of its approval by the Board of Directors. If at said meeting the
stockholders of the Company do not approve the Plan, the Plan shall
terminate.
5.2 Compliance with Other Laws and Regulations.
The Plan, the grant and exercise of Options hereunder, and the
obligation of the Company to sell and deliver shares under such Options,
shall be subject to all applicable Federal and state laws, rules, and
regulations and to such approvals by any government or regulatory agency
as may be required. The Company shall not be required to issue or
deliver any certificates for shares of Common Stock prior to (a) the
listing of such shares on any stock exchange on which the Common Stock
may then be listed and (b) the completion of any registration or
qualification of such shares under any Federal or state law, or any
ruling or regulation of any government body which the Company shall, in
its sole discretion, determine to be necessary or advisable.
5.3 Amendments.
The Board of Directors may discontinue the Plan at any time, and may
amend it from time to time, but no amendment, without approval by
stockholders, may (a) increase the total number of shares which may be
issued under the Plan or to any individual under the Plan, (b) reduce
the Option price for shares which may be purchased pursuant to Options
under Articles II and III of the Plan, (c) extend the period during
which Options may be granted, or (d) change the class of employees to
whom Options may be granted, except as provided in Section 1.6. Other
than as expressly permitted under the Plan, no outstanding Option may be
revoked or altered in a manner unfavorable to the Optionee without the
consent of the Optionee.
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5.4 No Rights As Shareholder.
No Optionee shall have any rights as a shareholder with respect to any
share subject to his or her Option prior to the date of issuance to him
or her of a certificate or certificates for such shares.
5.5 Withholding.
Whenever the Company proposes or is required to issue or transfer shares
of Common Stock under the Plan, the Company shall have the right to
require the Optionee to remit to the Company an amount sufficient to
satisfy any Federal, state or local withholding tax liability prior to
the delivery of any certificate or certificates for such shares.
Whenever under the Plan payments are to be made in cash, such payments
shall be made net of an amount sufficient to satisfy any Federal, state,
or local withholding tax liability.
5.6 Continued Employment Not Presumed.
This Plan and any document describing this Plan and the grant of any
stock Option or Stock Appreciation Right hereunder shall not give any
Optionee or other employee a right to continued employment by the
Company or its Subsidiaries or affect the right of the Company or its
Subsidiaries to terminate the employment of any such person with or
without cause.
5.7 Effective Date; Duration.
The Plan shall become effective as of the consummation of the
Reorganization subject to stockholder approval pursuant to Section 5.1
and shall expire on March 31, 1997. No Options may be granted under the
Plan after March 31, 1997, but Options granted on or before that date
may be exercised according to the terms of the option agreements and
shall continue to be governed by and interpreted consistent with the
terms hereof.
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1988 SUBSTITUTE STOCK OPTION PLAN
OF CHATTAHOOCHEE BANCORP., INC.
FOR THE 1987 STOCK OPTION PLAN
OF THE CHATTAHOOCHEE FINANCIAL CORPORATION
ARTICLE I
GENERAL
1.1 Purpose of the Plan.
The purpose of the 1988 Substitute Stock Option Plan of Chattahoochee Bancorp,
Inc. for the 1987 Stock Option Plan of The Chattahoochee Financial Corporation
(the "Plan") is (i) for Chattahoochee Bancorp, Inc. (the "Company") to assume
The Chattahoochee Financial Corporation 1987 Stock Option Plan (the "Former
Plan"); (ii) for the Company to assume all outstanding options and stock
appreciation rights granted under the Former Plan; (iii) to assist the Company
and its Subsidiaries, including The Chattahoochee Bank ("Chattahoochee"), in
securing and retaining key employees of outstanding ability by making it
possible to offer them an increased incentive to join or continue in the
service of the Company and Chattahoochee; and (iv) to increase the key
employees' efforts for the Company's and Chattahoochee's welfare by
participating in the ownership and growth of the Company.
1.2 Definitions
(a) "Acceleration Event" means any event which in the opinion of the Board of
Directors of the Company is likely to lead to changes in control of share
ownership of the Company, whether or not such change in control actually
occurs;
(b) "Board of Directors" or "Board" means the Board of Directors of the Company;
(c) "Code" means the Internal Revenue Code of 1986, as amended;
(d) "Common Stock" means common stock of the Company having a par value of
$1.00 per share;
(e) "Fair Market Value", so long as the Common Stock is not traded on an
established securities market, means the value determined by the Board of
Directors or the Committee (as hereinafter defined) taking into account those
factors affecting or reflecting value as it deems relevant, including, but not
limited to, recent sales prices, book value, earnings, reasonably expected
changes in book value or earnings, and values of stock of banks similar to the
Company. If the Common
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Stock is traded in the over-the-counter market, fair market value means the
closing "asked" price of the shares in the over-the-counter market on the day
on which such value is to be determined or, if such "asked" price is not
available, the last sales price on such day or, if no shares were traded on
such day, on the next preceding day on which the shares were traded, as
reported by the National Association of Securities Dealers Automatic Quotation
System (NASDAQ) or other national quotation service. If the shares are listed
on a National Securities Exchange, "fair market value" means the closing price
of the shares on such National Securities Exchange on the day on which such
value is to be determined or, if no shares were traded on such day, on the
next preceding day on which shares were traded, as reported by National
Quotation Bureau, Inc. or other national quotation service;
(f) "Incentive Stock Option" means an option or Substituted Option to purchase
shares of Common Stock which is intended to qualify as an incentive stock
option as defined in Section 422A of the Code;
(g) "Key Employee" means any person, including officers and directors, in the
regular full-time employment of the Company or its Subsidiaries who, is
designated a Key Employee by the Committee referred to in Section 1.3, and is
or is expected to be primarily responsible for the management, growth, or
supervision of some part or all of the business of the Company or its
Subsidiaries. The power to determine who is and who is not a Key Employee is
reserved solely for the Committee;
(h) "Nonqualified Stock Option" means an option or Substituted Option to
purchase shares of Common Stock which is not intended to qualify as an
Incentive Stock Option as defined in Section 422A of the Code;
(i) "Option" means an Incentive Stock Option or a Nonqualified Stock Option;
(j) "Optionee" means a Key Employee to whom an Option is granted under the
Plan;
(k) "Parent" means any corporation which qualifies as a parent of a corporation
under the definition of "parent corporation" contained in Section 425(e) of the
Code;
(l) "Stock Appreciation Right" shall have the meaning stated in Article IV of
the Plan;
(m) "Subsidiary" means any corporation which qualifies as a subsidiary of a
corporation under the definition of "subsidiary corporation" contained in
Section 425(f) of the Code;
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(n) "Substituted Option" means an incentive stock option or nonqualified stock
option granted under the Former Plan and assumed by the Company in accordance
with Code Section 425 (see Section 1.4(b) of the Plan);
(o) "Term" means the period during which a particular Option may be exercised
as determined by the Committee and as provided in the option agreement.
1.3 Administration of the Plan.
The Plan shall be administered by the Stock Option Committee (the "Committee")
appointed by the Board of Directors consisting of at least three members from
the Board of Directors. No person while a member of the Committee shall be
eligible to participate in the Plan. Subject to the control of the Board, and
without limiting the generality thereof, Section 1.7 hereof, the Committee
shall have the power to interpret and apply the Plan and to make regulations
for carrying out its purpose. More particularly, the Committee shall determine
which Key Employees shall be granted Options under the Plan, the number of
shares subject to each Option, the price per share under each Option, the Term
of each Option, and any restrictions on the exercise of each Option. When
granting Options, the Committee shall designate the Option as either an
Incentive Stock Option or a Nonqualified Stock Option. The Committee shall also
designate whether the Option is granted with Stock Appreciation Rights.
Determinations by the Committee under the Plan (including, without limitation,
determinations of the person to receive Options, the form, amount and timing of
such Options, and the terms and provisions of such Options and the agreements
evidencing same) need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Options under the Plan,
whether or not such persons are similarly situated.
1.4 Shares Subject to the Plan.
(a) The total number of shares that may be purchased pursuant to Options or
transferred pursuant to the exercise of Stock Appreciation Rights under the
Plan shall not exceed 200,000 shares of Common Stock. Shares subject to the
Options which terminate or expire prior to exercise shall be available for
future Options. Shares represented by an unexercised Option surrendered upon an
exercise of Stock Appreciation Rights including, without duplication, any
shares issued in payment of any Stock Appreciation Rights, shall be deducted
from the aggregate and shall not be available for further Options hereunder.
Shares issued pursuant to the Plan may be either unissued shares of Common
Stock or reacquired shares of Common Stock held in treasury.
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(b) Options and Stock Appreciation Rights have been issued under the Former
Plan prior to the Company's merger with The Chattahoochee Financial
Corporation ("Chattahoochee Financial") as contemplated by the Agreement and
Plan of Reorganization dated as of July 15, 1988, by and among the Company,
The Buckhead Bank, and Chattahoochee Financial (the "Reorganization").
Notwithstanding anything to the contrary in this Plan, all Options and Stock
Appreciation Rights outstanding under the Former Plan immediately prior to the
Reorganization shall be assumed by the Company. Substituted Options shall be
issued for all Options and Stock Appreciation Rights granted under the Former
Plan in accordance with the principles of Code Sections 425(a) and 425(h).
Shares subject to such Substituted Options shall be considered part of the
200,000 shares of Stock reserved for issuance under this Plan. In the event a
Substituted Option lapses, the shares subject to such lapsed Substituted Option
shall become available for further grants under this Plan.
1.5 Terms and Conditions of Options.
All Options shall be evidenced by agreements in such form as the Committee
shall approve from time to time subject to the provisions of Article II or
Article III, as appropriate, and the following provisions:
(a) Exercise Price. Except as provided in Section 3.1, the exercise price of
the Option shall not be less than the Fair Market Value (as determined by the
Committee) of the Common Stock at the time the Option is granted.
(b) Exercise. The Committee shall determine whether the Option shall be
exercisable in full at any time during the Term or in cumulative or
noncumulative installments during the Term.
(c) Termination of Employment. An Optionee's Option shall expire on the earlier
of the expiration of (i) three months after the termination of the Optionee's
employment for any reason other than death or disability (as defined in Section
422A(c)(7) of the Code), or (ii) the Term specified in Section 2.1 or 3.1(a) as
the case may be. In the event of exercise of the Option after termination of
employment the Optionee may exercise the Option only with respect to the shares
which could have been purchased by the Optionee at the date of termination of
employment. However, the Committee may, but is not required to, waive any
requirements made pursuant to Section 1.5(b) so that some or all of the shares
subject to the Option may be exercised within the time limitation described in
this subsection. An Optionee's employment shall be deemed to terminate on the
last date for which he receives a regular wage or salary payment.
(d) Death or Disability. Upon termination of an Optionee's employment by reason
of death or disability (as determined by the
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Committee consistent with the definition of Section 422A(c)(7) of the Code),
the Option shall expire unless exercised upon the earlier of the expiration of
(i) 12 months of the date of such termination, or (ii) the Term specified in
Section 2.1 or 3.1(a) as the case may be. The Optionee or his successor in
interest, as the case may be, may exercise the Option only as to the shares
which could have been purchased by the Optionee at the date of his termination
of employment. However, the Committee may, but is not required to, waive any
requirements made pursuant to Section 1.5(b) so that some or all of the shares
subject to the Option may be exercised within the time limitation described in
this subsection.
(e) Payment. Payment for shares as to which an Option is exercised shall be
made in such manner and at such time or times as shall be provided in the
option agreement, including cash, Common Stock of the Company which was
previously acquired by the Optionee, or any combination thereof. The Fair
Market Value of the surrendered Common Stock as of the date of exercise shall
be determined in valuing Common Stock used in payment for Options.
(f) Nontransferability. No Option granted under the Plan shall be transferable
other than by will or by the laws of descent and distribution. During the
lifetime of the Optionee, an Option shall be exercisable only by the Optionee.
(g) Additional Provisions. Each option agreement may contain such other terms
and conditions not inconsistent with the provisions of the Plan as the
Committee may deem appropriate from time to time.
1.6 Stock Adjustments; Mergers.
Notwithstanding Section 1.4, in the event the outstanding shares are increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company or of any other corporation by reason
of any merger, sale of stock, consolidation, liquidation, recapitalization,
reclassification, stock split up, combination of shares, or stock dividend, the
total number of shares set forth in Section 1.4 shall be proportionately and
appropriately adjusted by the Committee. If the Company continues in existence,
(i) the number and kind of shares that are subject to any Option and the option
price per share shall be proportionately and appropriately adjusted without any
change in the aggregate price to be paid therefor upon exercise of the Option,
and (ii) the Committee may make such adjustments in the number and kind of
Stock Appreciation Rights as it shall deem appropriate in the circumstances. If
the Company will not remain in existence or substantially all of its voting
Common Stock and Common Stock will be purchased by a single purchaser or group
of purchasers acting together, then the Committee may (i) declare that all
Options and
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Stock Appreciation Rights shall terminate 30 days after the Committee gives
written notice to all Optionees of their immediate right to exercise all
Options and Stock Appreciation Rights then outstanding (without regard to
limitations on exercise otherwise contained in the Options), or (ii) notify all
Optionees that all Options and Stock Appreciation Rights granted under the Plan
shall apply with appropriate adjustments as determined by the Committee to the
securities of the successor corporation to which holders of the numbers of
shares subject to such Options and Stock Appreciation Rights would have been
entitled, or (iii) some combination of aspects of (i) and (ii). The
determination by the Committee as to the terms of any of the foregoing
adjustments shall be conclusive and binding. Any fractional shares resulting
from any of the foregoing adjustments under this section shall be disregarded
and eliminated.
1.7 Acceleration Event.
If an Acceleration Event occurs in the opinion of the Board of Directors,
based on circumstances known to it, the Board of Directors may direct the
Committee to declare that all Options and Stock Appreciation Rights granted
under the Plan shall become exercisable immediately notwithstanding the
provisions of the respective Option agreements regarding exercisability.
1.8 Notification of Exercise.
Options shall be exercised by written notice directed to the Secretary of the
Company at the principal executive offices of the Company. Such written notice
shall be accompanied by any payment required pursuant to Section 1.5(e).
Exercise by an Optionee's heir or the representative of his estate shall be
accompanied by evidence of his authority to so act in form reasonably
satisfactory to the Company.
ARTICLE II
INCENTIVE STOCK OPTIONS
2.1 Terms of Incentive Stock Options.
Each Incentive Stock Option granted under the Plan shall be exercisable only
during a Term fixed by the Committee; provided, however, that the Term shall
end no later than 10 years after the date the Incentive Stock Option is
granted.
2.2 Limitation on Options.
The aggregate Fair Market Value of Common Stock (determined at the time the
Incentive Stock Option is granted) subject to Incentive Stock
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Options granted to a Key Employee under all plans of the Key Employee's employer
corporation and its Parent or Subsidiary corporations and that become
exercisable for the first time by such Key Employee during any calendar year
may not exceed $100,000.
2.3 Continued Employment.
Whether military, government or other service or other leave of absence shall
constitute a termination of employment shall be determined in each case by the
Committee at its discretion, and any determination by the Committee shall be
final and conclusive. A termination of employment shall not occur where the
Optionee transfers from the Company to one of its Subsidiaries or transfers
from a Subsidiary to the Company.
2.4 Special Rule for Ten Percent Shareholder.
If at the time an Incentive Stock Option is granted, and employee owns stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of his employer corporation or of its Parent or any of
its Subsidiaries, as determined using the attribution rules of Section 425(d)
of the Code, then the terms of the Incentive Stock Option shall specify that
the option price shall be at least 110% of the Fair Market Value of the stock
subject to the Incentive Stock Option and such Incentive Stock Option shall not
be exercisable after the expiration of five years from the date such Incentive
Stock Option is granted.
2.5 Interpretation.
In interpreting this Article II of the Plan and the provisions of individual
option agreements, the Committee and the Board shall be governed by the
principles and requirements of Sections 421, 422A and 425 of the Code, and
applicable Treasury Regulations.
ARTICLE III
NONQUALIFIED STOCK OPTIONS
3.1 Terms and Conditions of Options.
In addition to the requirements of Section 1.5, Nonqualified Stock Options
shall be subject to the following provisions:
(a) Term. Each Nonqualified Stock Option granted under the Plan shall be
exercisable only during a Term fixed by the Committee.
(b) Termination of Employment. Notwithstanding the provisions of Sections
1.5(c) and 1.5(d), the Stock Option Committee in its discretion
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may provide, either upon the original grant of an Option or in an amendment to
an Incentive or Nonqualified Stock Option, that an Option may be exercisable
during a Term that does not expire upon the expiration of three months
following an Optionee's termination of employment (one year in the case of
termination as a result of death or disability), but in no event later than the
Term specified in Section 3.1(a) above.
(c) Exercise Price. The Company may elect to grant Nonqualified Stock Options at
a price less than the Fair Market Value of the Common Stock at the time the
Option is granted but in no event less than the par value of the Common Stock.
3.2 Section 83(b) Election.
The Company recognizes that certain persons who receive Nonqualified Stock
Options may be subject to restrictions regarding their right to trade Common
Stock under applicable securities laws. Such may cause Optionee's exercising
such Options not to be taxable under the provisions of Section 83(c) of the
Code. Accordingly, Optionees exercising such Nonqualified Stock Options may
consider making an election to be taxed upon exercise of the Option under
Section 83(b) of the Code and to effect such election will file such election
with the Internal Revenue Service within thirty (30) days of exercise of the
Option and otherwise in accordance with applicable Treasury Regulations.
ARTICLE IV
STOCK APPRECIATION RIGHTS
4.1 Terms and Conditions of Stock Appreciation Rights.
Stock Appreciation Rights ("SAR") may be, but are not required to be, granted
by the Committee in connection with grant of an Option. All SARs shall be in
such form as the Committee may from time to time determine and shall be subject
to the following terms and conditions:
(a) Term and Exercise. An SAR shall be exercisable only (i) with the approval
of the Committee, (ii) during the Term of the Option to which it relates, (iii)
at such times as the Option to which it relates is exercisable, and (iv) if the
Fair Market Value of the Common Stock subject to the Option surrendered (on the
date surrendered) minus the aggregate option price of the Common Stock subject
to the Option surrendered is a positive amount.
(b) Payment. In the event the Committee agrees to permit exercise of the SAR,
the Optionee shall surrender to the Company the right to exercise the Option
with respect to a specified number of shares as to
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which the Option is then exercisable. In return, the Optionee shall receive
from the Company no more than an amount payable in cash and/or in shares (as
determined by the Committee after considering the request of the Optionee)
equal to the difference between the Fair Market Value of Common Stock as to
which the Optionee has surrendered the Option and the exercise price with
respect thereto. In the event the Committee determines to tender shares in full
or partial payment of the SAR, the number of shares to be issued to the
Optionee shall be based on the Fair Market Value of the shares as of the date
of exercise of the SAR. No fractional shares shall be issued to Optionees upon
exercise of an SAR. Instead, the Company shall pay the Optionee the value of
such fractional share based upon the Fair Market Value of a share on the date
the SAR is exercised.
(c) Nontransferability. An SAR granted under the Plan shall be transferable
only when the Option to which it relates is transferable.
4.2 Other Terms and Conditions.
Option agreements reflecting Stock Appreciation Rights which are granted under
the Plan may contain such other conditions not inconsistent with the provisions
of the Plan as the Committee may deem appropriate from time to time.
4.3 Notification of Request to Exercise.
The Optionee shall request the Committee's approval to exercise a Stock
Appreciation Right by written notice to the Secretary of the Company at the
principal executive offices of the Company. Such written notice shall state the
number of shares subject to the Option for which approval of the exercise of
the SAR is requested and the Optionee's preferred form of payment of the SAR,
as hereinafter provided. The Optionee may indicate his or her preference to
receive payment of the SAR in cash or in Common Stock or in a combination
thereof. Notwithstanding anything to the contrary contained herein, the
Committee shall have absolute discretion in determining whether the request for
approval of the exercise of the SAR shall be approved and, if such approval is
given, whether payment shall be made in cash or Common Stock or in a combination
thereof.
Within 30 days after the delivery to the Secretary of the Optionee's request to
exercise the SAR as provided above, the Committee shall inform the Optionee
in writing of its determination by personal delivery of such written
determination to the Optionee or by mailing its written determination to the
Optionee by certified or registered mail, return receipt requested. The
Optionee must act on any approved exercise of an SAR within 30 days after the
date of such determination by the Committee (or such longer period as may be
permitted by the Committee) and in
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accordance with the terms approved by the Committee. Exercise shall be by
written notice actually delivered, or mailed by certified or registered mail,
return receipt requested, to the Secretary of the Company at the principal
executive offices of the Company.
4.4 Effect of Exercise.
Upon exercise of a Stock Appreciation Right, the Option to which it relates
shall lapse with respect to the shares as to which the SAR is exercised and
such shares shall not be available for further grant of Options.
ARTICLE V
ADDITIONAL PROVISIONS
5.1 Stockholder Approval.
The Plan shall be submitted for the approval of the stockholders of the Company
at the first annual meeting of stockholders held subsequent to or coincident
with the adoption of the Plan and in all events within one year of its
approval by the Board of Directors. If at said meeting the stockholders of the
Company do not approve the Plan, the Plan shall terminate.
5.2 Compliance with Other Laws and Regulations.
The Plan, the grant and exercise of Options hereunder, and the obligation of
the Company to sell and deliver shares under such Options, shall be subject to
all applicable Federal and state laws, rules, and regulations and to such
approvals by any government or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for shares
of Common Stock prior to (a) the listing of such shares on any stock exchange
on which the Common Stock may then be listed and (b) the completion of any
registration or qualification of such shares under any Federal or state law, or
any ruling or regulation of any government body which the Company shall, in its
sole discretion, determine to be necessary or advisable.
5.3 Amendments.
The Board of Directors may discontinue the Plan at any time, and may amend it
from time to time, but no amendment, without approval by stockholders, may (a)
increase the total number of shares which may be issued under the Plan or to
any individual under the Plan, (b) reduce the Option price for shares which may
be purchased pursuant to Options under Articles II and III of the Plan, (c)
extend the period during which Options may be granted, or (d) change the class
of employees to whom Options may be granted, except as provided in Section 1.6.
Other
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than as expressly permitted under the Plan, no outstanding Option may be
revoked or altered in a manner unfavorable to the Optionee without the consent
of the Optionee.
5.4 No Rights As Shareholder.
No Optionee shall have any rights as a shareholder with respect to any share
subject to his or her Option prior to the date of issuance to him or her of a
certificate or certificates for such shares.
5.5 Withholding.
Whenever the Company proposes or is required to issue or transfer shares of
Common Stock under the Plan, the Company shall have the right to require the
Optionee to remit to the Company an amount sufficient to satisfy any Federal,
state or local withholding tax liability prior to the delivery of any
certificate or certificates for such shares. Whenever under the Plan payments
are to be made in cash, such payments shall be made net of an amount sufficient
to satisfy any Federal, state, or local withholding tax liability.
5.6 Continued Employment Not Presumed.
This Plan and any document describing this Plan and the grant of any stock
Option or Stock Appreciation Right hereunder shall not give any Optionee or
other employee a right to continued employment by the Company or its
Subsidiaries or affect the right of the Company or its Subsidiaries to
terminate the employment of any such person with or without cause.
5.7 Effective Date; Duration.
The Plan shall become effective as of the consummation of the Reorganization
subject to stockholder approval pursuant to Section 5.1 and shall expire on
March 31, 1997. No Options may be granted under the Plan after March 31, 1997,
but Options granted on or before that date may be exercised according to the
terms of the option agreements and shall continue to be governed by and
interpreted consistent with the terms hereof.
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The Merchant Bank of Atlanta
Incentive Stock Option Plan
1. Purpose. The Purpose of The Merchant Bank of Atlanta
Incentive Stock Option Plan (the "Plan") is to advance
the interests of The Merchant Bank of Atlanta (the
"Bank") by encouraging and enabling present and future
key employees of the Bank and any parent or subsidiary to
acquire a financial interest in the Bank through
incentive stock options under the Plan. The Bank
believes that the Plan will also aid the Bank and any
parent or subsidiary in attracting and retaining
outstanding key employees and in stimulating the efforts
of such employees to work for the success of the Bank.
2. Administration.
(a) General. The Plan shall be administered, construed
and interpreted by the Compensation Committee (the
"Committee") of the Board of Directors. In the event
that there is not a Committee established at any time
during the term of any option granted thereunder,
references herein to the Committee shall be interpreted
to be references to the Board of Directors.
(b) Grant of Options. The Committee shall from time to
time recommend the persons who shall participate in the
Plan and the extent of their participation. The
Committee also shall recommend the price to be paid for
shares upon the exercise of options granted under the
Plan, the period within which each option may be
exercised, and the terms and conditions of each
individual Stock Option Plan Agreement by and between
the Bank and the holder of the option. The terms and
conditions of each Individual Stock Option Agreement
shall be consistent with the provisions of the Plan, but
the Committee may provide for such additional terms and
conditions, not to conflict with the provisions of the
Plan, as it deems advisable. All such recommendations by
the Committee shall be final upon approval of the Board
of Directors.
(c) Interpretation of Plan. In interpreting the Plan,
the Committee and Board of Directors shall be governed by
the principals and requirements of sections 421, 422A,
425 and related sections of the Internal Revenue Code of
1986, as amended (the "Code"), and the Treasury
Regulations applicable to the incentive stock options and
incentive stock option plans. Where applicable, unless
otherwise defined, a parent corporation in an unbroken
chain of corporations ending with the Bank if, at the
time the option is granted, each of the corporations
other than the Bank owns stock possessing fifty percent
(50%) or more of the total combined voting power of all
<PAGE>
classes of stock in one of the other corporations in the
chain. A subsidiary corporation is any corporation in an
unbroken chain of corporations beginning with the Bank
if, at the time the option is granted, each of the
corporations, other than the last corporation in the
unbroken chain, owns stock possessing fifty percent
(50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in the
chain. Such definitions of parent and the subsidiary
shall be consistent with the definitions of such terms as
set forth in Code section 425 (f). All other terms used
herein shall have and shall be interpreted as having the
meanings set forth in the applicable provisions of the
Code. The interpretation and construction by the
Committee of any provision of or term used in the Plan or
any option granted under the Plan and any determination
pursuant to any provision of the Plan or any such option
shall be final and conclusive, unless otherwise
determined by the Board of Directors. No member of the
Committee or Board of Directors shall be liable for any
action or determination made in good faith, and members
of the Committee and Board of Directors shall be entitled
to indemnification and reimbursement from time to time
for expenses incurred in defense of such good faith
action or determination.
3. Eligibility. Options under the Plan may be granted to key
senior officers, key officers and other key employees of the
Bank or of one or more of any future parents or subsidiaries
of the Bank who, in the opinion of the supervision of the
business of the Bank or its parents or subsidiaries. Options
may be granted under the Plan only to persons who are employed
by the Bank or one of its parents or subsidiaries at the time
of the grant. The fact that an employee is a member of the
Board of Directors of the Bank shall not make him ineligible
for an option grant unless the vote is required to secure a
majority vote in favor of the grant of his option. For
purposes of the Plan, a person to whom an option is granted
under the Plan shall be referred to as "Grantee".
4. Shares Subject to Plan. The shares subject to the Plan
shall be authorized but unissued or treasury shares of the
Bank's One Dollar ($1.00) par value Common Stock (the "Common
Stock"). Subject to readjustments in accordance with the
provisions of paragraph 6 of the Plan, the maximum number of
shares of Common Stock for which options may be granted under
the Plan shall be One Hundred Thousand (100,000), and the
adoption of the Plan by the Board of Directors of the Bank
shall constitute a reservation of One Hundred Thousand
(100,000) shares of Common Stock for issuance only upon the
exercise of options granted under the Plan for any reason
expires or is terminated prior to the end of the period during
which options may be granted under the Plan, the shares of
Common Stock allocable to the unexercised portion of such
<PAGE>
option may again be subject in whole or in part to any option
granted under the Plan.
5. Terms and Conditions of Options. Options granted
pursuant to the Plan shall be evidenced by agreements (the
"Stock Option Agreements") in such form as the Committee and
Board of Directors shall, consistent with the provisions of
Code sections 421, 422A, 425 and related sections of the Code
and applicable Treasury Regulations, approve from time to
time. Such Stock Option Agreements and the options evidenced
thereby shall comply with and be subject to the following
terms and conditions:
(a) Number of Shares. Each Stock Option Agreement shall
state the total number of shares of Common Stock to which
it pertains.
(b) Amount Limitation. A key employee may not be
granted incentive stock options which are exercisable for
the first time in any one calendar year under the Plan
and any other incentive stock option plan of the Bank or
any parent or subsidiary corporation of the Bank, for the
purchase of Common Stock with an aggregate fair market
value of more than One Hundred Thousand Dollars
($100,000) (valued as of the date of grant of the
option).
(c) Option Price. The options for each option granted
under the Plan shall be the amount determined by Board of
Directors, upon the recommendations of the Committee,
but, subject to the provisions of paragraph 5 (k) of the
Plan, shall not be less than One Hundred percent (100%)
of the fair market value of the shares of Common Stock
subject to the option on the date of grant of the option.
The date on which the Board of Directors approves the
granting of an option shall be considered the date on
which such option is granted. For purposes of the Plan,
the "fair market value" of the shares of Common Stock
shall be the mean between the high "bid" and the low
"asked" prices of Common Stock in the over-the-counter
market on the day on which such value is to be determined
or, if no shares were traded on such day, on the next
preceding day on which shares were traded, as reported.
If the Common Stock is not regularly traded in the over-
the-counter market but is registered on a national
securities exchange, the "fair market value" of the shares
of Common Stock mean the closing price of the Common
Stock on such national securities exchange on the day on
which such value is to be determined of, if no shares
were traded on such day, on the next preceding day on
which shares were traded, as reported by National
Quotation Bureau, Incorporated or other national
quotation service. If the Common Stock is not regularly
traded in the over-the-counter market or registered in a
<PAGE>
national securities exchange the Committee shall
determine the fair market value of the common stock in
good faith in accordance with Code section 422(c) (1) and
accompanying Treasury Regulations.
(d) Medium and Time of Payment. The option price shall
be payable upon the exercise of an option in cash or by
check or, if provided in the Stock Option Agreement, in
shares of Common Stock owned by the Grantee. In the
event that all or part of the option price is paid in
shares of Common Stock, the value of such shares shall be
equal to the fair market value of such shares on the date
of exercise of the option (determined as provided in
paragraph 5(c) of the Plan, and the Grantee shall deliver
to the Bank a certificate or certificates representing
such shares duly endorsed to the Bank or accompanied by
a duly-executed separate instrument of transfer
satisfactory to the Committee.
(e) Term and Exercise. Except as set forth in paragraph
5(j) of the Plan each option granted under the Plan shall
be exercisable by the Grantee only during a term fixed by
the Board of Directors upon recommendation of the
Committee ending not later than ten (10) years after the
date of grant of the option. The Board of Directors upon
recommendation of the Committee shall determine whether
the option shall be exercisable in full at any time
during the term or in cumulative or non-cumulative
installments during the term.
(f) Method of Exercise. All options granted under the
Plan shall be exercised by written notice directed to the
officer of the Bank indicated in the Stock Option
Agreement at the Bank's principal place of business.
Such written notice shall specify the form of payment
made by the Grantee or his successor as provided by
paragraph 5(d) of the Plan shall be accompanied by
payment in full of the option price for the shares for
which such option is being exercised. The Bank shall
make delivery of certificates representing the shares for
which an option has been exercised within a reasonable
period of time; provided, however, that if any law,
regulation or agreement requires the Bank to take any
action with respect to the shares for which an option has
been exercised before the issuance thereof, then the date
of delivery of such shares shall be extended for the
period necessary to take such action.
(g) Effect of Termination of Employment or Death.
(A) Termination of Employment. Except as
otherwise provided in this subparagraph (A) or in
subparagraph (B) below upon termination of
employment of any Grantee with the Bank or any
<PAGE>
parent or subsidiary corporation of the Bank for
any reason, all options held by the Grantee under
the Plan shall immediately terminate. Whether
military, government or other service leave of
absence shall constitute a termination of
employment shall be determined in each case by the
Committee in its discretion, and any determination
by the Committee shall be final and conclusive.
The Board of Directors upon recommendation of the
Committee at its election may provide any Stock
Option Agreement that the Grantee may exercise an
option at any time within three (3) months after
termination of employment of the Grantee with the
bank or any parent or subsidiary corporation then
employing Grantee (or within one (1) year after the
termination of such employment if such employment
is terminated due to the Grantee's permanent
disability). In no event, however, will the option
be exercisable after the expiration of the term of
the option. In addition, exercise of the option
following terms and conditions: (i) with respect
to any and all installments of the option that had
not become exercisable at the time of termination
of employment, the period of extension shall not,
unless otherwise provided in the Stock Option
Agreement, operate to permit such installment to
become exercisable within such period; and (ii)
with respect to any installment of the option that
had become exercisable at the time of termination
of employment, the period of extension shall not
operate to permit the exercise of such installment
may be exercised. For purposes of this
subparagraph (A), if any corporation ceases to be
parent or subsidiary of the Bank, the employment of
any Grantee employed by such corporation shall be
deemed to have terminated unless such Grantee
becomes an employee of the Bank or another parent
or subsidiary of the Bank simultaneously with or prior
to the time such corporation ceases to be a parent or
subsidiary of the Bank. For purposes of
the Plan, "permanent disability" shall mean a
permanent disability defined in Code section 105(d)
(4).
(B) Death. In granting any option under the Plan,
the Board of Directors and Committee may provide in
the Stock Option Agreement representing such option
that in the event of the death of a grantee at a
time when an option is exercisable by the Grantee,
the Grantee's personal representatives, heirs or
legatees (the "Grantee's Successors") may exercise
all or any portion of such option held by the
Grantee on the date of his death upon proof
satisfactory to the Bank of their authority. The
<PAGE>
Grantee's Successors must exercise any such option
within twelve (12) months after the date of
expiration of the option. Such exercise otherwise
shall be subject to the terms and conditions of the
Plan; provided, however, that with respect to any
installment of the option that had not become
exercisable on the date of the Grantee's death, the
period of extension shall not, unless otherwise
provided in the Option Agreement, operate to permit
such installment to become exercisable within such
period.
(h) Nonassignability of Option Rights. No option shall
be assignable or transferable by the Grantee except by
will or by the laws of descent and distribution. During
the lifetime of the Grantee, the option shall be
exercisable only by the Grantee.
(i) Rights as Stockholder. Neither the Grantee nor the
Grantee's Successors shall have rights as a stockholder
of the Bank with respect to shares of Common Stock
covered by the Grantee's option until the Grantee or the
Grantee's Successors become the holder of record of such
shares. Except as specified in paragraph 6 of the Plan,
no adjustment will be made for dividends or other rights
for which the record date is prior to the date on which
shares are issued upon exercise of an option.
(j) No Options in Certain Cases. Except as set forth in
paragraph 5(j) of the Plan, no options shall be granted
except within period of ten (10) years after the
effective date of the Plan. In no event shall an option
be granted to any person who, at the time such option is
granted, owns (as defined in Code sections 422A and 425)
stock possessing more than ten percent (10%) of the total
combined voting power or value of all classes of stock of
the Bank or any parent or subsidiary corporation of the
Bank unless (i) the option price under such option is not
less than one hundred and ten percent (110%) of the fair
market value of the shares of Common Stock subject to
such option on the date of grant of such option
(determined as provided in paragraph 5(c) of the Plan and
(ii) the terms of the Stock Option Agreement shall make
such option expire on the date that is the fifth (5th)
anniversary after the date on which the option is granted.
(k) Miscellaneous Provisions. The Stock Option
Agreements authorized under the Plan may contain such
other provisions, not inconsistent with the Plan or the
applicable provisions of the Code as the Committee shall
deem advisable.
<PAGE>
6. Adjustments.
(a) Recapitalization. In the event that, after the
effective date of the Plan, the outstanding shares of
Common Stock are increased or decreased or changed into
or exchanged for a different number or kind of shares or
other securities of the bank by reason of a
recapitalization, reclassification, stock split-up,
combination of shares, or dividend payable in stock,
appropriate adjustments shall be made by the Committee in
the number and kind of shares or other securities for
which options may be granted under the Plan. In
addition, the Committee upon the occurrence of such an
event shall make appropriate adjustments in the number
and kind of shares or other securities as to which
outstanding options, or portions thereof then
unexercised, shall be exercisable, so that each Grantees's
proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in outstanding
options shall be made without change in the total price
applicable to the unexercised portion of each option and
with corresponding adjustment in the option price per
share. Any fractional shares resulting from any of the
foregoing adjustments under this subparagraph (a) shall
be disregarded and eliminated. Each adjustment under
this subparagraph (s) shall be made in such a manner that
such adjustment will not constitute a "modification" as
defined in Code section 425. All adjustments made by the
Committee (unless otherwise determined by the Board of
Directors) under this subparagraph (a) shall be final and
conclusive.
(b) Reorganizations; Liquidations. If the Bank shall be
a party to any reorganizations involving a merger,
consolidation or acquisition of the stock or the assets
of the Bank, the Committee, in its discretion, may:
(A) Declare that all options granted under the
Plan shall become exercisable immediately
notwithstanding the provisions of the respective
Stock Option Agreements regarding exercisability
and that all options shall terminate thirty (30)
days after the Committee gives written notice to
all Grantees of their immediate right to exercise
all options then outstanding and of the Committee's
decision to terminate all options not exercised
within such thirty-day period; or
(B) Notify all Grantees that all options granted
under the Plan shall apply with appropriate
adjustments as determined by the Committee to the
securities of the resulting corporation to which
holders of the number of shares of Common Stock
subject to such options would have been entitled.
<PAGE>
The adoption of a plan of dissolution or liquidation by
the Board of Directors and the stockholders of the Bank
shall cause every option outstanding under the Plan to
terminate to the extent not exercised prior to the
adoption of the Plan of dissolution or liquidation by the
stockholders; provided, however, that the Committee, in
its discretion, may declare that all options granted
under the Plan shall exercisable immediately
notwithstanding the provisions of the respective Stock
Option Agreements regarding exercisability; and provided
further that in the event of the adoption of a plan of
dissolution or liquidation in connection with a
reorganization as described in the first sentence of this
subparagraph (b), outstanding options shall be governed
by and be subject to the provisions of such sentence.
(c) Rights or Warrants. If any rights or warrants to
subscribe for additional shares are given pro rata to
holders of outstanding shares of the Common Stock, each
Grantee under the Plan shall be entitled to the same
rights or warrants on the same basis as holders of the
outstanding shares with respect to such portion of the
Grantee's option that may be exercised on or prior to the
date of the expiration of such rights or warrants.
7. Effective Date and Termination of Plan.
(a) Effective Date. The effective date of the Plan
shall be February 16, 1989, the date of its adoption by
the Board of Directors of the Bank, provided that the
stockholders of the Bank (acting at a duly called meeting
of the stockholders) shall approve before January 1,
1990.
(b) Termination. The Plan shall terminate ten (10)
years after its effective date, but the Board of
Directors may terminate the Plan at any time prior to
such date. Termination of the Plan shall not alter or
impair any of the rights or obligations under any option
theretofore granted under the Plan unless the Grantee
shall consent.
8. Application of Funds. The proceeds received by the Bank
from the sale of Shares of Common Stock pursuant to
options granted under the Plan will be used for general
corporate purposes.
9. No Obligation to Exercise Option. The granting of an
option shall impose no obligation upon the Grantee to
exercise such option.
10. Amendment. The Board of Directors of the Bank by
majority vote may at any time and from time to time amend
the Plan in such respects as it shall deem advisable in
<PAGE>
order that options granted under the Plan shall be
"incentive stock options" as defined in Code section
422A, or to conform to any change in the law, or for any
other purpose; provided, however, that without the
approval of the stockholders of the Bank, no such
amendment shall change:
(a) The maximum number of shares of Common Stock as
to which options may be granted under the Plan
(except by operation of the adjustment provisions
of the Plan); or
(b) The date on which the Plan will terminate as
provided by paragraph 7(b) of the Plan; or
(c) The minimum option price as provided under
paragraph 5(c) of the Plan, other than to change
the manner of determining the fair market value of
the Common Stock to conform with any provisions of
the Internal Revenue Code or Treasury Regulations
thereunder applicable to incentive stock options or
if such change is necessitated by a change in the
manner in which Common Stock is traded; or
(d) The period during which options may be granted
as provided in paragraph 5(j) of the Plan
(provided, however, that the Board of Directors of
the Bank shall have the power set forth in
paragraph 7(b) to terminate the Plan); or
(e) The provisions of paragraph 3 of the Plan,
relating to the determination of employees to whom
options may be granted.
Any amendment to the Plan shall not, without the written
consent of the Grantee, affect such Grantee's rights under any
option theretofore granted to such Grantee.
<PAGE>
BANK SOUTH CORPORATION
1994 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
1. Purpose. The purpose of the Bank South 1994 Stock Option Plan for
Outside Directors (the "Plan") is to advance the interests of Bank South
Corporation (the "Company") by encouraging ownership of the Company's $5.00
par value common stock (the "Common Stock") by non-employee directors of the
Company, thereby giving such directors an increased incentive to devote their
efforts to the success of the Company.
2. Administration. Grants of options under this Plan are automatic. This Plan
is intended to be a "formula plan" as recognized by Rule 16b-3(c)(2)(ii)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and shall be interpreted accordingly.
3. Eligibility. Except as provided otherwise in this Paragraph 3, options
under the Plan shall be granted in accordance with Paragraph 5 to each
member of the Company's Board of Directors who is not an employee of the
Company (an "Outside Director"); provided that shares of the Company's
Common Stock remain available for grant hereunder in accordance with
Paragraph 4. An Outside Director to whom an option is granted under the
Plan shall be referred to hereinafter as a "Grantee."
4. Shares Subject to Plan. The shares subject to the Plan shall be
authorized but unissued or reacquired shares of the Company's Common
Stock. Subject to adjustment in accordance with the provisions of Paragraph
6 of the Plan, the maximum number of shares of Common Stock for which options
may be granted under the Plan shall be 300,000 and the initial adoption of the
Plan by the Board of Directors of the Company shall constitute a reservation
of 300,000 authorized but unissued, or reacquired, shares of Common Stock
for issuance only upon the exercise of options granted under the Plan. In
the event that any outstanding option granted under the Plan for any reason
expires or is terminated prior to the end of the period during which options
may be granted under the Plan, the shares of Common Stock allocable to the
unexercised portion of such option may again be subject in whole or in part
to any option granted under the Plan.
5. Terms and Conditions of Options. Options granted pursuant to the Plan
shall be evidenced by Stock Option Agreements in such form as shall comply
with and be subject to the following terms and conditions:
(a) Grant. Each Outside Director who is serving in such capacity as of the
day following the 1994 annual meeting of the Company's shareholders
("Annual Meeting") shall be granted an option to purchase 2,000 shares of
the Company's Common Stock, subject to adjustment as provided in Section 6.
As of the day following each subsequent Annual Meeting, each Outside Director
who is serving in such capacity as of such date shall be granted an option
to purchase 2,000 shares Common Stock, subject to
<PAGE>
adjustment pursuant to Section 6. Each such day that options are to be
granted under the Plan is referred to hereinafter as a "Grant Date."
If on any Grant Date, shares of Common Stock are not available under
this Plan to grant to Outside Directors the full amount of a grant
contemplated by the immediately preceding paragraph, then each Outside
Director shall receive an option (a "Reduced Grant") to purchase shares
of Common Stock in an amount equal to the number of shares of Common
Stock then available under the Plan divided by the number of Outside
Directors as of the applicable Grant Date. Fractional shares shall be
ignored and not granted.
If a Reduced Grant has been made and, thereafter, during the term of
this Plan, additional shares of Common Stock become available for grant
(e.g., because of the forfeiture or lapse of an option), then each person
who was an Outside Director both on the Grant Date on which the Reduced
Grant was made and on the date additional shares of Common Stock become
available (a "Continuing Outside Director") shall receive an additional
option to purchase shares of Common Stock. The number of newly available
shares shall be divided equally among the options granted to the Continuing
Outside Directors; provided, however, that the aggregate number of shares
of Common Stock subject to a Continuing Outside Director's additional option
plus any prior Reduced Grant to the Continuing Outside Director on the
applicable Grant Date shall not exceed 2,000 shares of Common Stock
(subject to adjustment pursuant to paragraph 6). If more than one Reduced
Grant has been been made, available options shall be granted beginning
with the earliest such Grant Date.
(b) Option Price. The option price for each option granted under the Plan shall
be the Fair Market Value (as defined below) of the shares of Common Stock
subject to the option on the date of grant of the option. For purposes of the
Plan, the "Fair Market Value" of the shares of Common Stock shall mean the
closing "asked" price of the shares in the over-the-counter market on the day
on which such value is to be determined or, if such "asked" price is not
available, the last sales price on such day or, if no shares were traded on
such day, on the next preceding date on which the shares were traded, as
reported by the National Association of Securities Dealers Automatic Quotation
System (NASDAQ) or other national quotation service. If the shares are listed
on a national securities exchange, "Fair Market Value" means the closing price
of the shares on such national securities exchange on the day on which such
value is to be determined or, if no shares were traded on such day, on the
next preceding day on which shares were traded, as reported by National
Quotation Bureau, Inc. or other national quotation service.
(c) Medium and Time of Payment. The option price shall be payable in full upon
the exercise of an option in cash or by check. To the extent permitted under
Regulation T of the Federal Reserve Board, and subject to applicable securities
laws, options may be exercised through a broker in a so-called "cashless
exercise" whereby the broker sells the option shares and delivers cash sales
proceeds to the Company in payment
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<PAGE>
of the exercise price. However, to avoid short-swing profit liability under
Section 16(b) of the Exchange Act, the Grantee should not engage in a cashless
exercise within six months of the date of grant. In no event may shares of
Common Stock be used as payment of the exercise price of the option.
(d) Term. Each option granted under the Plan shall, to the extent not
previously exercised, terminate and expire on the date five (5) years after the
date of grant of the option, unless earlier terminated as provided hereinafter
in Section 5(g).
(e) Exercisability. Each option granted under this Plan shall be immediately
exercisable, in whole or in part. However, to avoid short-swing profit
liability under Section 16(b) of the Exchange Act, the Grantee should wait at
least six (6) months from the date of grant of the option before selling the
underlying shares.
(f) Method of Exercise. All options granted under the Plan shall be exercised
by an irrevocable written notice directed to the Secretary of the Company at
the Company's principal place of business. Except in the case of a "cashless
exercise" through a broker, such written notice shall be accompanied by
payment in full of the option price for the shares for which such option is
being exercised. In the case of a "cashless exercise," payment in full of the
option price for the shares for which such option is being exercised shall be
paid in cash by the brokerage from the sale proceeds. The Company shall make
delivery of certificates representing the shares for which an option has been
exercised within a reasonable period of time; provided, however, that if any
law, regulation or agreement requires the Company to take any action with
respect to the shares for which an option has been exercised before the
issuance thereof, then the date of delivery of such shares shall be
extended for the period necessary to take such action. Certificates
representing shares for which options are exercised under the Plan may bear
such restrictive legends as may be necessary or desirable in order to comply
with applicable federal and state securities laws. Nothing contained in the
Plan shall be construed to require the Company to register any shares of
Common Stock underlying options granted under this Plan.
(g) Effect of Termination of Directorship or Death.
(i) Termination of Directorship. Upon termination of any Grantee's
membership on the Board of Directors of the Company for any reason other
than for cause of death, the options held by the Grantee under the Plan
shall terminate ninety (90) days following the date of termination of the
Grantee's membership on the Board or, if earlier, on the date of
expiration of the options as provided by Paragraph 5(d) of the Plan. If the
Grantee exercises the options after termination of the Grantee's service on
the Board of Directors, the Grantee may exercise the options only with
respect to the shares that were otherwise exercisable on the date of
termination of the Grantees' service on the Board. Such exercise otherwise
shall be subject to the terms and conditions of the Plan. If the Grantee's
membership on
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<PAGE>
the Board of Directors is terminated for cause, all options granted to such
Grantee shall expire upon such termination.
(ii) Death. In the event of the death of a Grantee, the Grantee's personal
representatives, heirs or legatees (the "Grantee's Successors") may
exercise the options held by the Grantee on the date of death, upon proof
satisfactory to the Company of their authority. The Grantee's Successors
must exercise any such options within one (1) year after the Grantee's
death or in any event prior to the date on which the options expire as
provided by Paragraph 5(d) of the Plan. Such exercise otherwise shall be
subject to the terms and conditions of the Plan.
(h) Nonassignability of Option Rights. No option shall be assignable or
transferable by the Grantee except by will, by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined
in Title I of the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986. During the lifetime of the Grantee, the option
shall be exercisable only by the Grantee.
(i) Rights as Shareholder. Neither the Grantee nor the Grantee's Successors
shall have rights as a shareholder of the Company with respect to shares of
Common Stock covered by the Grantee's option until the Grantee or the Grantee's
Successors become the holder of record of such shares.
(j) No Options after Ten Years. No options shall be granted except within a
period of ten (10) years after the effective date of the Plan.
6. Adjustments.
(a) If any change is made in the stock subject to the Plan, or subject to
any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the Plan and
outstanding options will be automatically and appropriately adjusted,
including the maximum number of shares subject to the Plan and the number
of shares and price per share of stock subject to outstanding options.
(b) In the event of: (i) a merger or consolidation in which the Company is not
the surviving corporation; (ii) a reverse merger in which the Company is
the surviving corporation but the shares of the Company's common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash other
otherwise; or (iii) any other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged, then
any surviving corporation shall assume any options outstanding under the Plan
or shall substitute similar options for those outstanding under the Plan.
If there is no surviving corporation, all outstanding options shall expire.
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<PAGE>
7. Effective Date and Termination of Plan.
(a) Effective Date. If approved by the Board of Directors of the Company, the
Plan shall become effective upon approval of the same by the shareholders of the
Company no later than the first annual meeting of shareholders held after
approval of the Plan by the Board of Directors (the "1994 Annual Meeting").
(b) Termination. The Plan shall terminate ten (10) years after its effective
date, but the Board of Directors may terminate the Plan at any time prior to
such date. Termination of the Plan shall not alter or impair any of the rights
or obligations under any option theretofore granted under the Plan unless the
Grantee shall so consent.
8. No Obligation to Exercise Option. The granting of an option shall impose no
obligation upon the Grantee to exercise such option.
9. Amendment. The Board of Directors of the Company by majority vote may amend
the Plan; provided, however, that without the approval of the shareholders of
the Company, no such amendment shall change:
(a) The maximum number of shares of Common Stock as to which options may be
granted under the Plan (except by operation of the adjustment provisions of
the Plan); or
(b) The date on which the Plan will terminate as provided by Paragraph 7(b) of
the Plan; or
(c) The number of shares of Common Stock subject to each option; or
(d) The option price as provided under Paragraph 5(b) of the Plan; or
(e) The provisions of Paragraph 3 of the Plan relating to the determination of
persons to whom options may be granted; or
(f) The provisions of the Plan in such a manner so as to increase materially
(within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934,
as amended) the benefits accruing under the Plan.
The provisions of the Plan determining (i) the persons eligible to receive
grants of options, (ii) the timing of option grants, (iii) the number of shares
subject to options, (iv) the exercise price of options, (v) the periods during
which options are exercisable, and (vi) the dates on which options terminate,
may not be amended more than once every six months other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income Security
Act of 1974, or the rules thereunder.
-5-
<PAGE>
It is expressly contemplated that the Board may amend the Plan in any respect
that the Board deems necessary to cause the Plan to meet the requirements
of Rule 16b-3 (or any successor rule) under the Exchange Act and otherwise
to comport with the provisions of such Act and the applicable regulations
thereunder.
Any amendment to the Plan shall not, without the written consent of the
Grantee, affect such Grantee's rights under any option theretofore granted
to such Grantee.
-6-
<PAGE>
STOCK OPTION PLAN
1. The Purpose of the Plan. This stock option (the "Plan") is intended
to provide an opportunity for directors, officers and key employees of
Gwinnett Bancshares, Inc. (the "Company"), Gwinnett Federal Savings and
Loan Association ("Gwinnett Federal") and its subsidiaries, as
subsidiaries are defined in section 425 of the Code(1) (its
"subsidiaries"), to acquire shares of the Company's common stock. The
Plan provides for the grant of incentive stock options, as defined in
section 422A of the Code ("Incentive Stock Options"), and stock options
not qualifying as Incentive Stock Options ("Non-Qualified Stock Options")
as an incentive to service or continued service to the Company and its
subsidiaries and to aid the Company in obtaining and retaining directors
and key personnel of outstanding ability. As used herein, "Options"
refers to both Incentive Stock Options and Non-Qualified Stock Options.
2. Stock Subject to the Plan. The maximum number of shares of the
common stock, $1.00 par value, of the Company (the "Stock") which may be
issued under Incentive Stock Options and Non-Qualified Stock Options
granted under the Plan in the discretion of the Committee (as defined
below) shall be a total of 190,000 shares of Stock. If an Option
expires or terminates for any reason without being exercised in full,
the unpurchased shares subject to such Stock Option shall again be
available for purposes of the Plan.
3. Administration of the Plan. This Plan shall be administered by the
Compensation Committee of the Board of Directors consisting of not less
than three directors (the "Committee"). The Committee shall have full
authority in its discretion to determine the directors, officers or key
employees of the Company and its subsidiaries to whom Options shall be
granted and the terms and provisions of Options, subject to the Plan.
In making such determinations, the Committee may take into account the nature
of the services rendered and to be rendered by the respective directors,
officers and key employees, their present and potential contributions to
the Company and any other factors which the Committee deems relevant.
Subject to the provisions of the Plan, the Committee shall have full and
conclusive authority to interpret the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the
terms and provisions of the respective Option agreements (which need not
be identical); and to make all other determinations necessary or
advisable for the proper administration of the Plan.
4. Eligibility and Limits. Options may be granted only to directors,
officers and key employees of the Company and its present or future
subsidiaries. No Incentive Stock Option shall be granted to any person
who, at the time such Option is granted, owns (as defined in sections
422A and 425 of the Code) Stock possessing more than 10% of the total
combined voting power of all classes of Stock of the Company, and no
Incentive Stock Option may be granted to a director not otherwise
employed by the Company or a subsidiary of the Company. The aggregate
fair market value (determined as of the time an Incentive Stock Option
is granted) of the Stock with respect to which Incentive Stock Options
can become exercisable for the first time by any person in any one
calendar year under this Plan and under all other Plans of the Company
(within the meaning of sections 422A and 425 of the Code) shall not
exceed $100,000.
5. Incentive Stock Options and Non-Qualified Stock Options. At the time
any Option is granted under this Plan, the Committee shall determine
whether said Option is to be an Incentive Stock Option or a Non-Qualified
Stock Option, and the Option shall be clearly identified as to its
status as an Incentive Stock Option or a Non-Qualified Stock Option.
The number of shares as to which Incentive Stock Options and
Non-Qualified Stock Options shall be granted shall be determined by the
Committee in its sole discretion, subject to the provisions of section
4 above with respect to the
___________
(1) The "Code" herein refers to the Internal Revenue Code of 1986 as
amended.
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aggregate fair market value of the Stock for
which an officer or employee shall be granted Incentive Stock Options in
any calendar year and subject to the provisions of section 2 above as to
the total number of shares for which both Incentive Stock Options and
Non-Qualified Stock Options may be granted under the Plan. At the time
any Incentive Stock Option granted under this Plan is exercised, the
certificates representing the shares of Stock purchased pursuant to said
Option shall be clearly identified as representing shares purchased upon
exercise of an Incentive Stock Option.
6. Terms and Conditions of Options. Subject to the following
provisions, all Options shall be in such form and upon such terms and
conditions as the Committee in its discretion may from time to time
determine.
(a) Option Price. The Option price per share shall not be less than 100% of
the fair market value per share of the Stock (as determined in good
faith by the Committee) on the date the Option is granted, which shall
be the date on which the Committee has approved the terms and
conditions of a stock option agreement evidencing the Option and has
determined the recipient of the Option and the number of shares covered
by the Option and has taken all such other action as is necessary to
complete the grant of the Option.
(b) Option Terms. No Option shall be exercisable after the
expiration of ten years from the date the Option is granted.
(c) Payment. Payment for all shares purchased pursuant to
exercise of an Option shall be made in cash. Such payment shall
be made at the time that the Option or any part thereof is
exercised, and no shares shall be issued until full payment
therefor has been made. As such, the holder of an Option shall
have none of the rights of a stockholder.
(d) Conditions to Exercise of an Option. Subject to the
provisions of subparagraph (g) below, no Option shall be
exercisable until the holder shall have been employed by or
served as a director of the Company or one of its subsidiaries
for at least six months from the date of grant.
(e) Nontransferability of Options. An Option shall not be
transferable or assignable except by will or by the laws of
descent and distribution and shall be exercisable, during the
holder's lifetime, only by him/her.
(f) Termination of Employment or Death. In the event of
termination of employment or of a directorship of the holder for
any reason other than death or disability, the holder may not
exercise an Option more than three months after the date of such
termination; provided, however, that no Option shall be
exercised following the date of notice to the holder of
termination of his/her employment by the Company or any of its
subsidiaries for violation by him/her of any provision of any
written employment contract between the Company or any of its
subsidiaries and the holder. Upon any termination of employment
of the holder by reason of disability, within the meaning of
section 105(d)(4) of the Code, the holder may not exercise an
Option later than twelve months after the date of such
termination of employment. If the holder of an Option dies,
such Option may be exercised (to the extent that the holder
shall have been entitled to do so at the date of his/her death)
by a legatee or legatees of the holder under his/her last will,
or by his/her personal representatives or distributees, at any
time during the twelve-month period following his/her death.
Notwithstanding this subparagraph (f), no Option may be
exercised more than ten years after the date on which such
Option was granted. For purposes of this subparagraph (f),
employment or a directorship of a holder shall not be deemed
terminated so long as the holder is employed by, or a
director of, a parent or subsidiary of the Company or by another
corporation (or a parent or subsidiary corporation of such other
corporation) which has assumed the Option of the holder in a
transaction to which section 425(a) of the Code is applicable.
(g) Limited Rights Of Exercise. Notwithstanding the provisions
of subparagraph (d) above, but subject to the provisions of
subparagraph (b) above, an Option may be exercised in any amount
up to the full number of shares covered by the Option without
regard to the date of grant of the Option if: (1) a tender offer
or exchange offer has been made for shares of Stock, other than
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one made by the Company, provided that the corporation, person
or other entity making such offer purchases or otherwise
acquires shares of Stock pursuant to such offer; or (2) the
stockholders of the Company have approved a definitive agreement
(the "Agreement") to merge or consolidate with or into another
corporation pursuant to which the Company will not survive or will
survive only as a subsidiary of another savings bank or savings
and loan association or bank holding company or other
corporation or to sell or otherwise dispose of all or
substantially all of its assets; or (3) any person or group (as
such terms are defined in section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Act")), becomes the
holder of 25% or more of the outstanding shares of Stock. If
any of the events specified in this subparagraph (g) have
occurred, the Option shall be fully exercisable: (x) in the
event of (1) above, within a 30-day period commencing on the
date of expiration of the tender offer or exchange offer; or (y)
in the event of (2) above, within a 30-day period commencing on
the date of approval by the shareholders of the Agreement; or
(z) in the event of (3) above, within a 30-day period commencing
on the date upon which the Company is provided a copy of Schedule
13D (filed pursuant to section 13(d) of the Act and rules and
regulations promulgated thereunder) indicating that any person or
group has become the holder of 25% or more of the outstanding shares
of Stock or, if the Company is not subject to section
13(d) of the Act, within a 30-day period commencing on the date
upon which the Company receives written notice that any person
or group has become the holder of 25% or more of the outstanding
shares of Stock.
7. Changes in Capitalization; Merger; Liquidation. The number of shares
of Stock as to which Options may be granted, the number of shares
covered by each outstanding Option, and the price per share in each
outstanding Option, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Stock resulting from a
subdivision or combination of shares or the payment of a stock dividend
in shares of Stock to holders of outstanding shares of Stock or any other
increase or decrease in the number of such shares effected without receipt of
consideration by the Company. If the Company shall be the surviving
entity in any merger or consolidation, recapitalization,
reclassification or shares or similar reorganization, the holder of each
outstanding Option shall be entitled to purchase, at the same times and
upon the same terms and conditions as are then provided in the Option,
the number and class of shares of Stock or other securities which
a holder of the number of shares of Stock subject to the Option at the
time of such transaction would have been entitled to receive as a result of
such transaction. In the event of any such changes in capitalization of
the Company, the Committee may make such additional adjustments in the
number and class of shares of Stock or other securities with respect to
which outstanding Options are exercisable and with respect to which
future Options may be granted as the Committee in its sole discretion
shall deem equitable or appropriate, subject to the provisions of
paragraph 8. A dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving corporation or
in which the Company survives only as a subsidiary of another corporation
shall cause each outstanding Option to terminate, except to the extent
that another savings bank, savings and loan association or other legal
entity assumes such Option or substitutes another Option therefor in a
transaction to which section 424(a) of the Code is applicable. In the
event of a change of the Company's shares of Stock into the same number
of shares with a different par value or without par value, the shares
resulting from any such change shall be deemed to be the Stock within the
meaning of the Plan. Except as expressly provided in this paragraph 7, the
holder of an Option shall have no rights by reason of any subdivision or
combination of shares of Stock of any class or the payment
of any stock dividend or any other increase or decrease in the number of
shares of Stock of any class or by reason of any dissolution, liquidation,
merger or consolidation or distribution to the Company's stockholders of assets
or stock of another corporation, and any issue by the Company of shares of
Stock of any class, or securities convertible into shares of Stock of
any class, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Stock subject
to the Option. The existence of the Plan and the Options granted
pursuant to the Plan shall not affect in any way the right or power of
the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any
merger or consolidation of the Company, any issue of debt or
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equity securities having preferences or priorities as to the Stock or
the rights thereof, the dissolution or liquidation of the Company, any
sale or transfer of all or any part of its business or assets, or any
other corporate act or proceeding.
8. Termination and Amendment of the Plan. The Plan shall terminate
on the date ten years after adoption of the Plan by the Board of
Directors, and no Option shall be granted under the Plan after that
date, but Options granted before termination of the Plan shall remain
exercisable thereafter until they expire or lapse according to their terms.
The Plan may be terminated, modified or amended by the shareholders or the
Board of Directors of the Company; provided, however, that:
(a) no such termination, modification or amendment without the
consent of the holder of an Option shall adversely affect his rights under
such Option; and
(b) any modification or amendment which would (1) increase the
aggregate number of shares of Stock which may be issued under the Plan
(other than an increase merely reflecting a change in capitalization
such as a stock dividend or stock split), (2) modify the designation of
individuals eligible to receive Options under the Plan, or
(3) materially increase the benefits accruing to holders of Options granted
or to be granted under the Plan, within the meaning of Rule 16b-3
issued by the Securities and Exchange Commission under the Act, as
amended, shall be effective only if it is approved by the shareholders of
the Company at the next annual meeting of shareholders after the date
of adoption by the Board of Directors of such modification or
amendment.
9. Approval by Shareholders. The Plan shall become effective when
adopted by the Board of Directors, but no Option granted under the Plan
shall become exercisable unless and until the Plan shall have been
approved by the Company's shareholders. If such shareholder approval is
not obtained within twelve months after the date of the Board's adoption
of the Plan, any Options previously granted under the Plan shall
terminate and no further Options shall be granted. Subject to this
limitation, options may be granted under the Plan at any time after the
effective date and before the date fixed for termination of the Plan.
10. Construction. All Incentive Stock Options to be granted hereunder
are intended to comply with sections 422A and 425 of the Code, and all
provisions of this Plan and all Incentive Stock Options granted
hereunder shall be construed in such manner as to effectuate that
intent.
Adopted by the Board of Directors of Gwinnett
Federal Savings and Loan Association on
November 16, 1989.
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