As filed with the Securities and Exchange Commission on July 20, 1994
Registration No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________
CCB FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
North Carolina 56-1347849
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
_________________________
111 Corcoran Street
Durham, North Carolina 27701
(Address of principal executive offices, including Zip Code)
_________________________
LONG-TERM INCENTIVE PLAN
(Full title of the plan)
_________________________
ERNEST C. ROESSLER
CCB Financial Corporation
Post Office Box 931
Durham, North Carolina 27702
(919) 683-7777
(Name and address of agent for service)
Copy to:
Anthony Gaeta, Jr., Esq.
Ward and Smith, P.A.
Two Hannover Square, Suite 2400
Post Office Box 2091
Raleigh, North Carolina 27602-2091
(919) 836-1800
_________________________
CALCULATION OF REGISTRATION FEE (1)
Proposed Proposed
Title of Amount to Maximum Maximum
Securities be Offering Aggregate Amount of
to be Registered Price Offering Registration
Registered Per Share Price Fee(1)
Common Stock,
$5 par value 500,000 $39.875 $19,937,500 $6,875
(1) The shares of Common Stock are being offered to eligible employees
and directors of Registrant and its direct and indirect
subsidiaries pursuant to options granted to them in accordance with
the terms of Registrant's Long-Term Incentive Plan (the "Plan").
Pursuant to Rule 457(h), the Aggregate Offering Price and the
Registration Fee have been calculated on the basis of the maximum
number of shares to be issued under the Plan and an Offering Price
equal to the average of the high and low prices of securities of
the same class on July 13, 1994.
<PAGE>
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by Registrant with the
Securities and Exchange Commission (the "Commission") under the
Securities Exchange Act of 1934 (the "Exchange Act") are
incorporated herein by reference:
(i) Registrant's Annual Report on Form 10-K
(Commission File No. 0-12358) for the year ended December 31,
1993, as amended on July 20, 1994;
(ii) Registrant's Current Report on Form 8-K
dated March 14, 1994;
(iii) Registrant's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994.
In addition, all documents subsequently filed with the
Commission by Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date hereof and prior to
the filing of a post-effective amendment which indicates that all
securities being offered have been sold or which deregisters all
securities then remaining unsold shall be deemed to be
incorporated herein by reference and to be a part hereof from the
dates of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Registrant is incorporated under the laws of the State of
North Carolina. North Carolina's Business Corporation Act (the
"BCA") contains provisions prescribing the extent to which
directors and officers of a corporation shall or may be
indemnified.
The BCA permits a corporation, with certain exceptions, to
indemnify a current or former officer or director against
liability if he acted in good faith and he reasonably believed
(i) in the case of conduct in his official capacity with the
corporation, that his conduct was in its best interests, (ii) in
all other cases, that his conduct was at least not opposed to its
best interests and (iii) with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. A corporation may not indemnify him in connection with
a proceeding by or in the right of the corporation in which he
was adjudged liable to the corporation or in connection with any
other proceeding charging improper personal benefit to him,
whether or not involving action in his official capacity, in
which he was adjudged liable on the basis that personal benefit
was improperly received by him unless and only to the extent that
the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, he
is fairly and reasonably entitled to indemnity for such
reasonable expenses incurred which the court shall deem proper.
The BCA requires a corporation to indemnify an officer or
director in the defense of any proceeding to which he was a party
against reasonable expenses to the extent that he is wholly
successful on the merits or otherwise in his defense.
Indemnification under the BCA generally shall be made by the
corporation only upon a determination that indemnification of the
director or officer was proper under the circumstances because he
met the applicable standard of conduct. Such determination may
be made by (i) the Board of Directors by a majority vote of a
quorum consisting of directors who are not parties to such
proceeding, (ii) if such a quorum is not obtainable, by majority
vote of a committee duly designated by the Board of Directors
consisting solely of two or more directors not at the time party
to such proceeding, (iii) if such quorum is not obtainable, or,
even if obtainable if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or
(iv) by the stockholders of the corporation.
The BCA permits a corporation to provide for indemnification of
directors and officers in its Articles of Incorporation or Bylaws
or by contract or otherwise, against liability in various
proceedings, and to purchase and maintain insurance policies on
behalf of these individuals. The Articles of Incorporation of
the Registrant provide for the elimination of the personal
liability for monetary damages for certain breaches of fiduciary
duty and the Bylaws of the Registrant provide for the
indemnification of directors and officers to the maximum extent
permitted by law.
Item 7. Exemption From Registration Claimed
Not applicable.
Item 8. Exhibits
The following exhibits are filed herewith or incorporated
herein by reference as part of this Registration Statement:
4 Specimen of Registrant's Common Stock
certificate (incorporated by reference to Exhibit 4 of
Registrant's Registration Statement on Form S-8 dated
April 19, 1993).
5 Opinion of Ward and Smith, P.A. as to the
legality of the securities being registered (filed
herewith).
23.1 Consent of KPMG Peat Marwick (filed herewith).
23.2 Consent of Ward and Smith, P.A. (contained in
its opinion filed herewith as Exhibit 5).
24 Power of Attorney (filed herewith).
99 Copy of Long-Term Incentive Plan (filed
herewith).
<PAGE>
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 of 1933;
(ii) to reflect in the
Prospectus any facts or events arising
after the effective date of the
Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the
Registration Statement;
(iii) to include any
material information with respect to the
plan of distribution not previously
disclosed in the Registration Statement
or any material change to such
information in the Registration
Statement;
provided, however, that
paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in
the Registration Statement.
(2) That, for purposes of determining
any liability under the Securities Act of 1933,
each such post-effective amendment shall be
deemed to be a new Registration Statement
relating to the securities offered therein, and
the offering of such securities at that time
shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by
means of a post-effective amendment any of the
securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant
to the foregoing provisions, or otherwise, the Registrant has
been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Durham, State of North Carolina, on
July 15, 1994.
CCB Financial Corporation
(Registrant)
By:/s/ Ernest C. Roessler
Ernest C. Roessler
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
Signature Title Date
/s/ Ernest C. Roessler President and July 18, 1994
Ernest C. Roessler Director
(Principal
Executive
Officer)
/s/ W. Harold Parker, Jr. Senior Vice July 18, 1994
W. Harold Parker, Jr. President and
Controller
(Principal
Financial and
Accounting
Officer)
*/s/ W. L. Burns, Jr. Chairman of the July 18, 1994
W. L. Burns, Jr. Board
Director ___________, 1994
J. Harper Beall, III
*/s/ James B. Brame, Jr. Director July 18, 1994
James B. Brame, Jr.
*/s/ Timothy B. Burnett Director July 18, 1994
Timothy B. Burnett
*/s/ Arthur W. Clark Director July 18, 1994
Arthur W. Clark
*/s/ Kinsley van R. Dey, Jr. Director July 18, 1994
Kinsley van R. Dey, Jr.
*/s/ Frances Hill Fox Director July 18, 1994
Frances Hill Fox
Director ___________, 1994
T. E. Haigler, Jr.
*/s/ George R. Herbert Director July 18, 1994
George R. Herbert
Director ___________, 1994
Edward S. Holmes
Director ___________, 1994
Owen G. Kenan
Director ___________, 1994
Eugene J. McDonald
Director ___________, 1994
Hamilton W. McKay, Jr., M.D.
*/s/ Eric B. Munson Director July 18, 1994
Eric B. Munson
Director ___________, 1994
John B. Stedman
Director ___________, 1994
H. Allen Tate, Jr.
*/s/ Phail Wynn, Jr. Director July 18, 1994
Dr. Phail Wynn, Jr.
By:/s/ W. Harold Parker, Jr.
W. Harold Parker, Jr., Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
Number Description Page Number
4 Specimen of Registrant's Common Stock Incorporated by
reference
5 Opinion of Ward and Smith, P.A. as
to the legality of the securities
being registered
23.1 Consent of KPMG Peat Marwick
23.2 Consent of Ward and Smith, P.A. Included in Exhibit 5
24 Power of Attorney
99 Copy of Long-Term Incentive Plan
<PAGE>
June 20, 1994
Board of Directors
CCB Financial Corporation
111 Corcoran Street
Durham, North Carolina 27701
RE: Long-Term Incentive Plan
Our File 93R0034(E)
Gentlemen:
We have acted as special counsel to CCB Financial Corporation
("CCB") in connection with the adoption of CCB's Long-Term
Incentive Plan (the "Plan") and the potential issuance by CCB of
up to 500,000 shares of its $5.00 par value common stock (the
"Shares") pursuant to the terms of the Plan.
In our capacity as special counsel, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of
the articles of incorporation, bylaws and corporate resolutions
of CCB, the Plan, the Registration Statement on Form S-8 relating
to the Plan filed by CCB with the Securities and Exchange
Commission (the "Registration Statement"), the relevant
provisions of Chapter 55 of the North Carolina General Statutes,
and such other records, documents and legal matters as we have
deemed relevant and necessary as the basis for rendering our
opinion hereinafter set forth. In addition, we have made
reasonable inquiries of the officers of CCB as to certain
relevant items. In all examinations of documents, we have
assumed the genuineness of all original documents and all
signatures and the conformity to original documents of all copies
submitted to us as certified, conformed or photostatic copies.
Based upon the foregoing, it is our opinion that all requisite
corporate action has been taken to adopt the Plan and to
authorize the issuance of the Shares pursuant thereto; and, that,
provided the Registration Statement shall have become and shall
remain effective, when the Shares registered thereunder shall
have been issued in accordance with the terms of the Plan as it
appears as an exhibit to the Registration Statement, the Shares
so issued will be validly authorized, legally issued, fully paid
and nonassessable shares of the common stock of CCB.
This opinion is furnished by us solely for your benefit in
connection with the Registration Statement and may not be quoted
or relied upon by, nor may copies be delivered to, any other
person or entity or used for any other purpose, without our prior
express written consent. We hereby expressly disclaim any duty
or responsibility to update this opinion or the information upon
which it is based after the date hereof.
We hereby consent to the reference to this firm in the
Registration Statement and to the filing of this opinion as an
exhibit thereto.
Yours very truly,
WARD AND SMITH, P.A.
RDR:rdr
RLMAIN\3927
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
CCB Financial Corporation
We consent to the use of our report incorporated herein by
reference in the Registration Statement to register shares
pursuant to the Long-Term Incentive Plan.
KPMG Peat Marwick
Raleigh, North Carolina
July 15, 1994
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of CCB
Financial Corporation, and the several undersigned officers and
directors thereof whose signatures appear below hereby makes,
constitutes and appoints Ernest C. Roessler and W. Harold Parker,
Jr. or either of them, its and his or her true and lawful attorneys,
with full power of substitution to execute, deliver and file in
its or his or her name and on its or his or her behalf, and in
each of the undersigned officer's and director's capacity or
capacities as shown below, (a) Registration Statements on
Form S-8 (or other appropriate form) with respect to the
registration under the Securities Act of 1933, as amended, of the
shares of Common Stock of CCB Financial Corporation, par value
$5.00 per share, to be issued pursuant to the CCB Financial
Corporation Long-Term Incentive Plan adopted by CCB Financial
Corporation for the benefit of the directors and key employees of
CCB Financial Corporation and its subsidiary corporations and all
documents in support thereof or supplemental thereto and any and
all amendments, including any and all post-effective amendments,
to the foregoing (hereinafter called the "Registration
Statements"), (b) such registration statements, petitions,
applications, consents to service of process or other
instruments, any and all documents in support thereof or
supplemental thereto, and any and all amendments or supplements
to the foregoing, as may be necessary or advisable to qualify or
register the securities covered by said Registration Statement;
and each of CCB Financial Corporation and said officers and
directors hereby grants to said attorneys, or any of them, full
power and authority to do and perform each and every act and
thing whatsoever as said attorney may deem necessary or advisable
to carry out fully the intent of this power of attorney to the
same extent and with the same effect as CCB Financial Corporation
might or could do, and as each of said officers and directors
might or could do personally in his or her capacity or capacities
as aforesaid, and each of CCB Financial Corporation and said
officers and directors hereby ratifies and confirms all acts and
things which said attorneys might do or cause to be done by
virtue of this power of attorney and its or his or her signatures
as the same may be signed by said attorneys to any or all of the
following (and/or any and all amendments and supplements to any
or all thereof): such Registration Statements filed under the
Securities Act of 1933, as amended, and all such registration
statements, petitions, applications, consents to service of
process and other instruments, and any all documents in support
thereof or supplemental thereto, filed under such securities
laws, regulations and requirements as may be applicable.
IN WITNESS WHEREOF, CCB Financial Corporation has
caused this power of attorney to be signed on its behalf, and
each of the undersigned Officers and Directors in the capacity or
capacities noted has hereunto set his or her hand on the date
indicated below.
CCB FINANCIAL CORPORATION
(Registrant)
By: /s/ Ernest C. Roessler
Ernest C. Roessler
Date: July 15, 1994
<PAGE>
Signature Title Date
/s/Ernest C. Roessler President and July 15, 1994
Ernest C. Roessler Director
(Principal
Executive
Officer)
/s/W. Harold Parker, Jr. Senior Vice July 15, 1994
W. Harold Parker, Jr. President and
Controller
(Principal
Financial and
Accounting
Officer)
W.L. Burns, Jr. Chairman of July 15, 1994
W. L. Burns, Jr. the Board
Director ________, 1994
J. Harper Beall, III
/s/James B. Brame, Jr. Director July 15, 1994
James B. Brame, Jr.
Director ________, 1994
Timothy B. Burnett
/s/Arthur W. Clark Director July 15, 1994
Arthur W. Clark
/s/Kinsley van R. Dey Director July 15, 1994
Kinsley van R. Dey
/s/ Frances Hill Fox Director July 15, 1994
Frances Hill Fox
Director ________, 1994
T. E. Haigler, Jr.
/s/George R. Herbert Director July 15, 1994
George R. Herbert
Director ________, 1994
Edward S. Holmes
Director ________, 1994
Owen G. Kenan
Director ________, 1994
Eugene J. McDonald
Director ________, 1994
Hamilton W. McKay, Jr., M.D.
/s/Eric B. Munson Director July 15, 1994
Eric B. Munson
Director ________, 1994
John B. Steadman
<PAGE>
Director ________, 1994
H. Allen Tate, Jr.
/s/Phail Wynn, Jr. Director July 15, 1994
Dr. Phail Wynn, Jr.
CCB Financial Corporation Long-Term Incentive Plan
Approved by Shareholders April 5, 1994
<PAGE>
TABLE OF CONTENTS
I. Long-Term Incentive Plan
1. Purpose
2. Definitions
3. Administration
4. Term of Plan/Common Stock Subject to Plan
5. Eligibility
6. Stock Options
7. Restricted Awards
8. Performance Units
9. Deferral Elections
10. Termination of Employment
11. Non-transferability of Awards
12. Changes in Capitalization and Other Matters
13. Change in Control
14. Amendment, Suspension and Termination
15. Miscellaneous
<PAGE>
CCB FINANCIAL CORPORATION
LONG-TERM INCENTIVE PLAN
1. Purpose. The purpose of the Long-Term Incentive Plan
(the "Plan") is to further and promote the interests of CCB
Financial Corporation (the "Company") and its shareholders by
enabling the Company to attract, retain and motivate key
employees, and to align the interests of such key employees and
the Company's shareholders. Additionally, the Plan's objectives
are to provide a competitive reward for achieving longer-term
goals, provide balance to short-term incentive awards, and
reinforce a one company perspective. To do this, the Plan offers
performance-based stock and cash incentives and other equity
based incentive awards and opportunities to provide such key
employees with a proprietary interest in maximizing the growth,
profitability and overall success of the Company.
2. Definitions. For purposes of the Plan, the
following terms shall have the meaning set forth below:
2.1 "Award" means an award or grant made to a
Participant under Sections 6, 7, and/or 8 of the Plan. "Award
Agreement" means the agreement executed by a Participant pursuant
to Sections 3.2 and 15.7 of the Plan in connection with the
granting of an Award.
2.2 "Board" means the Board of Directors of the
Company, as constituted from time to time.
2.3 "Code" means the Internal Revenue Code of 1986, as
in effect and as amended from time to time, or any successor
statute thereto, together with any rules, regulations and
interpretations promulgated thereunder or with respect thereto.
2.4 "Committee" means the Compensation Committee of
the Board, as constituted in accordance with Section 3 of the
Plan.
2.5 "Common Stock" means the Common Stock, $5.00 par
value, of the Company.
2.6 "Company" means CCB Financial Corporation, a North
Carolina corporation, or any successor corporation to CCB
Financial Corporation.
2.7 "Disability" means disability as determined by the
Committee in accordance with standards and procedures similar to
those under the Company's long-term disability plan, if any. If
the Company does not then maintain a long-term disability plan,
Disability shall mean the inability of a Participant, as
determined by the Committee, substantially to perform such
Participant's regular duties and responsibilities due to a
medically determinable physical or mental illness which has
lasted (or can reasonably be expected to last) for a period of
six (6) consecutive months.
2.8 "Exchange Act" means the Securities Exchange Act
of 1934, as in effect and as amended from time to time, or any
successor statute thereto, together with any rules, regulations
and interpretations promulgated thereunder or with respect
thereto.
2.9 "Fair Market Value" means on, or with respect to,
any given date, (i) the closing price of the Common Stock, as
reported on the over-the-counter-market by the Nasdaq system for
such date, or if the Common Stock was not traded on such date, on
the latest previous day on which the Common Stock was traded, or
(ii) the last sale price should the Common Stock be traded on any
national securities exchange on such date.
2.10 "Incentive Stock Option" means any stock option
granted pursuant to the provisions of Section 6 of the Plan that
is intended to be (and is specifically designated as) an
"incentive stock option" within the meaning of Section 422 of the
Code.
2.11 "Non-Employee Director" means a member of the
Board of Directors of the Company who is not an employee of the
Company.
2.12 "Non-Qualified Stock Option" means any stock
granted pursuant to the provisions of Section 6 of the Plan that
is not an Incentive Stock Option.
2.13 "Participant" means a key employee or Non-Employee
Director of the Company or any Subsidiary who is selected under
Section 5 to receive an Award by the Committee under the Plan.
2.14 "Performance Units" means the monetary units
granted under Section 8 of the Plan.
2.15 "Plan" means the CCB Financial Corporation Long-
Term Incentive Plan, as set forth herein and as in effect and as
amended from time to time (together with any rules and
regulations promulgated by the Committee with respect thereto).
2.16 "Restricted Award" means an Award of Restricted
Stock pursuant to the provisions of Section 7 of the Plan.
2.17 "Restricted Stock" means the restricted shares of
Common Stock granted pursuant to the provisions of Section 7 of
the Plan with the restriction that the holder may not sell,
transfer, pledge, or assign such Restricted Stock and such other
restrictions (which other restrictions may expire separately or
in combination, at one time, from time to time or in
installments), as determined by the Committee in accordance with
and as set forth in the Plan and/or the relevant Award Agreement.
2.18 "Retirement" means (i) as to officers and
employees, retirement from active employment with the Company and
its Subsidiaries and receiving benefits under the Company's
qualified retirement plan and (ii) as to Non-Employee Directors,
the same as "Retirement" under the Retirement policy in effect
for the Board on which the Participant was serving upon receipt
of an Award.
2.19 "Subsidiary(ies)" means any corporation (other
than the Company) in an unbroken chain of corporations, beginning
with the Company, if each of such corporations, other than the
last corporation in the unbroken chain, owns fifty percent (50%)
or more of the voting stock in one of the other corporations in
such chain.
3. Administration.
3.1 The Committee. The Plan shall be administered by
the Committee. The Committee shall be appointed from time to
time by the Board and shall be comprised of not less than three
(3) of the then members of the Board who qualify to administer
the Plan as disinterested persons within the meaning of Rule 16b3
of the Exchange Act. Members of the Committee shall serve at the
pleasure of the Board and the Board may at any time and from time
to time remove members from the Committee, or, subject to the
immediately preceding sentence, add members to the Committee. A
majority of the members of the Committee shall constitute a
quorum for the transaction of business. Any act or acts approved
in writing by all of the members of the Committee then serving
shall be the act or acts of the Committee (as if taken by
unanimous vote at a meeting of the Committee duly called and
held).
3.2 Plan Administration and Plan Rules. The Committee
is authorized to construe and interpret the Plan and to
promulgate, amend and rescind rules and regulations relating to
the implementation, administration and maintenance of the Plan.
Subject to the terms and conditions of the Plan, the Committee
shall make all determinations necessary or advisable for the
implementation, administration and maintenance of the Plan
including, without limitation, (a) selecting the Plan's
Participants, (b) making Awards in such amounts and form as the
Committee shall determine, (c) imposing such restrictions, terms
and conditions upon such Awards as the Committee shall deem
appropriate, and (d) correcting any defect or omission, or
reconciling any inconsistency, in the Plan and/or any Award
Agreement. The Committee may designate persons other than
members of the Committee to carry out the day-to-day
administration of the Plan under such conditions and limitations
as it may prescribe, except that the Committee shall not delegate
its authority with regard to selection for participation in the
Plan and/or the granting of any Awards to Participants. The
Committee's determinations under the Plan need not be uniform and
may be made selectively among Participants, whether or not such
Participants are similarly situated. Any determination, decision
or action of the Committee in connection with the construction,
interpretation, administration, implementation or maintenance of
the Plan shall be final, conclusive and binding upon all
Participants and any person(s) claiming under or through any
Participants. The Company shall effect the granting of Awards
under the Plan, in accordance with the determinations made by the
Committee, by execution of written agreements and/or other
instruments in such form as is approved by the Committee.
3.3 Liability Limitation. Neither the Board nor the
Committee, nor any member of either, shall be liable for any act,
omission, interpretation, construction or determination made in
good faith in connection with the Plan (or any Award Agreement),
and the members of the Board and the Committee shall be entitled
to indemnification and reimbursement by the Company in respect of
any claim, loss, damage or expense (including, without
limitation, attorneys' fees) arising or resulting therefrom to
the fullest extent permitted by law/or under any directors and
officers liability insurance coverage which may be in effect from
time to time.
4. Term of Plan/Common Stock Subject to Plan.
4.1 Term. The Plan shall terminate on December 31,
2003, except with respect to Awards then outstanding. After such
date no further Awards shall be granted under the Plan.
4.2 Common Stock Subject to Plan.
4.2.1 Common Stock. The Board shall reserve for
Awards under the Plan 500,000 shares of the authorized and
unissued shares. In the event of a change in the Common
Stock of the Company that is limited to a change in the
designation thereof to "Capital Stock" or other similar
designation, or to a change in the par value thereof, or
from par value to no par value, without increase or decrease
in the number of issued shares, the shares resulting from
any such change shall be deemed to be the Common Stock for
purposes of the Plan. Common Stock which may be issued
under the Plan shall be authorized and unissued shares. No
fractional shares of Common Stock shall be issued under the
Plan.
4.2.2 Maximum Number of Shares. The maximum
number of shares of Common Stock for any Participant for
which Awards may be granted under the Plan in any year is
50,000 shares.
4.2.3 Common Stock Replenished. The maximum
number of shares authorized for issuance under the Plan
shall be replenished one time (up to an additional 500,000
shares for a total authorization of up to 1,000,000 shares
of the authorized and unissued shares) during the life of
the Plan.
4.3 Computation of Available Shares. For the purpose
of computing the total number of shares of Common Stock available
for Awards under the Plan, there shall be counted against the
limitations set forth in Section 4.2 of the Plan the maximum
number of shares of Common Stock potentially subject to issuance
upon exercise or settlement of Awards granted under Sections 6
and 7 of the Plan, the number of shares of Common Stock issued or
subject to potential issuance under grants of Restricted Stock
pursuant to Section 7 of the Plan, and the maximum number of
shares of Common Stock potentially issuable under grants of
Performance Units pursuant to Section 8 of the Plan, in each case
determined as of the date on which such Awards are granted. If
any Awards expire unexercised or are forfeited, surrendered,
canceled, terminated or settled in cash in lieu of Common Stock,
the shares of Common Stock which were theretofore subject (or
potentially subject) to such Awards shall again be available for
Awards under the Plan to the extent of such expiration,
forfeiture, surrender, cancellation, termination or settlement of
such Awards; provided, however, that forfeited Awards shall not
again be available for Awards under the Plan if the Participant
received, directly or indirectly, any of the benefits of
ownership of the securities of the Company underlying such Award,
including, without limitation, the benefit described in Section
7.6 of the Plan.
5. Eligibility. Employees eligible for Awards under the
Plan shall consist of key employees who are officers or managers
of the Company and/or its Subsidiaries who are responsible for
the management, growth and protection of the business of the
Company and/or its Subsidiaries and whose performance or
contribution, in the sole discretion of the Committee, benefits
or will benefit the Company in a significant manner. Non
Employees (e.g., those with third party relationships such as
Directors) shall be eligible Participants for Non-Qualified Stock
Options and/or Restricted Stock at the sole discretion of the
Compensation Committee.
6. Stock Options.
6.1 Terms and Conditions. Stock options granted under
the Plan may be in the form of Incentive Stock Options or Non
Qualified Stock Options (sometimes referred to collectively
herein as the "Stock Option(s)". Such Stock Options shall be
subject to the terms and conditions set forth in this Section 6
and any additional terms and conditions, not inconsistent with
the express terms and provisions of the Plan, as the Committee
shall set forth in the relevant Award Agreement.
6.2 Grant. Stock Options may be granted under the
Plan in such form as the Committee may from time to time approve.
Subject to Section 5 of the Plan, Stock Options may be granted
alone or in addition to other Awards under the Plan.
Notwithstanding the above, no Incentive Stock Options shall be
granted to any employee who owns more than 10% of the combined
total voting power of the Company or any Subsidiary, unless the
requirements of Section 422(c)(6) of the Code are satisfied.
6.3 Exercise Price. The exercise price per share of
Common Stock subject to a Stock Option shall be determined by the
Committee at the time of grant; provided, however, that the
exercise price of an Incentive Stock Option shall not be less
than one hundred percent (100%) of the Fair Market Value of the
Common Stock on the date of the grant of such Incentive Stock
Option. For any employee who owns ten percent (10%) or more of
the combined total voting power of the Company or any Subsidiary,
the exercise price of an Incentive Stock Option shall not be less
than one hundred ten percent (110%).
6.4 Term. The term of each Stock Option shall be such
period of time as is fixed by the Committee at the time of grant;
provided, however, that the term of any Incentive Stock Option
shall not exceed ten (10) years after the date the Incentive
Stock Option is granted. For any employee who owns ten percent
(10%) or more of the combined total voting power of the Company
or any Subsidiary, the term of each Stock Option shall not exceed
five (5) years.
6.5 Method of Exercise. A Stock Option may be
exercised, in whole or in part, by giving written notice of
exercise to the Director of Personnel of the Company specifying
the number of shares to be purchased. Such notice shall be
accompanied by payment in full of the exercise price in cash, by
certified check, bank draft or money order payable to the order
of the Company or, if permitted by the terms of the relevant
Award Agreement and applicable law, by delivery of, alone or in
conjunction with a partial cash or instrument payment, (a) a
fully-secured, recourse promissory note, or (b) shares of Common
Stock already owned by the Participant or to be received upon
exercise of the Stock Option in a "cashless exercise" as
described below. The Committee may, in the relevant Award
Agreement, also permit Participants (either on a selective or
group basis) to simultaneously exercise Stock Options and sell
the shares of Common Stock thereby acquired, pursuant to a
brokerage "cashless exercise" arrangement, selected by and
approved of in all respects in advance by the Committee, and use
the proceeds from such sale as payment of the exercise price of
such Stock Options. Payment instruments shall be received by the
Company subject to collection. The proceeds received by the
Company upon exercise of any Stock Option may be used by the
Company for general corporate purposes.
6.6 Date of Exercise. Vesting dates will be specified
in the Award Agreement at the discretion of the Committee. Stock
Options that meet the vesting requirements may be exercised in
whole or in part at any time and from time to time during its
specified term.
7. Restricted Awards.
7.1 Terms and Conditions. Restricted Awards under the
Plan may be in the form of grants of Restricted Stock.
Restricted Awards shall be subject to the terms and conditions
set forth in this Section 7 and any additional terms and
conditions, not inconsistent with the express terms and
provisions of the Plan, as the Committee shall set forth in the
relevant Award Agreement.
7.2 Restricted Stock Grants. A grant of Restricted
Stock is an Award of shares of Common Stock, in uncertificated
form, issued to and registered with the Company's designated
Stock Transfer Agent, in the name of a Participant, subject to
such restrictions, terms and conditions as the Committee deems
appropriate, including, without limitation, restrictions on the
sale, assignment, transfer, hypothecation or other disposition of
such shares and the requirement that the Participant deposit such
shares with the Company while such shares are subject to such
restrictions and that such shares be forfeited upon termination
of employment for specified reasons within a specified period of
time.
7.3 Grants of Awards.
7.3.1 Subject to Section 5 of the Plan,
Restricted Awards may be granted alone or in addition to any
other Awards under the Plan. Subject to the terms of the
Plan, the Committee shall determine the number of Restricted
Awards to be granted to a Participant and the Committee may
impose different terms and conditions on any particular
Restricted Award made to any Participant.
7.3.2 With respect to each Participant receiving
an Award of Restricted Stock, this Award shall be issued in
an uncertificated form and registered in the name of such
Participant. The stock transfer books of the Company's
designated Stock Transfer Agent shall be noted with the
following legend with reference to the shares made subject
to this Award.
"These shares are subject to the terms and
restrictions of the CCB Financial Corporation Long Term
Incentive Plan; such shares are subject to forfeiture
or cancellation under the terms of said Plan; and such
shares shall not be sold, transferred, assigned,
pledged, encumbered, or otherwise alienated or
hypothecated except pursuant to the provisions of said
Plan, a copy of which Plan is available from CCB
Financial Corporation upon request."
Such Award shall be held in uncertificated form until the
restrictions thereon shall have lapsed and all of the terms
and conditions applicable to such grant shall have been
satisfied.
7.4 Restriction Period. In accordance with Sections
7.1 and/or 7.2 of the Plan, Restricted Awards shall only become
unrestricted and vest in the Participant in accordance with the
vesting schedule relating to the service performance restriction
applicable to such Restricted Award, as the Committee may
establish at the time of the Award in the relevant Award
Agreement (the "Restriction Period"). Notwithstanding the
immediately preceding sentence, in no event shall the Restriction
Period be less than one (1) year and one day after the date on
which such Restricted Award is granted. During the Restriction
Period applicable to a Restricted Award, such Award shall be
unvested and a Participant may not sell, assign, transfer,
pledge, encumber or otherwise dispose of or hypothecate such
Award. Upon satisfaction of the vesting schedule and any other
applicable restrictions, terms and conditions, the Participant
shall be entitled to receive payment of the Restricted Award or a
portion thereof, as the case may be, as provided in Section 7.5
of the Plan.
7.5 Payment of Awards.
7.5.1 Restricted Stock Grants. After the
satisfaction and/or lapse of the restrictions, terms and
conditions set by the Committee in respect of a grant of
Restricted Stock, a certificate for the number of shares of
Common Stock which are no longer subject to such
restrictions, terms and conditions shall, as soon as
practicable thereafter, be delivered to the Participant.
The remaining shares, if any, issued in respect of such
Restricted Stock shall either be forfeited and canceled, or
shall continue to be subject to the restrictions, terms and
conditions set by the Committee, as the case may be.
7.6 Shareholder Rights. A Participant shall have,
with respect to the shares of Common Stock received under a grant
of Restricted Stock, all of the rights of a shareholder of the
Company, including, without limitation, the right to vote the
shares and to receive any cash dividends. Stock dividends issued
with respect to such Restricted Stock shall be treated as
additional Restricted Stock grants and shall be subject to the
same restrictions and other terms and conditions that apply to
the shares of Restricted Stock with respect to which such stock
dividends are issued.
8. Performance Units.
8.1 Terms and Conditions. Performance Units shall be
subject to the terms and conditions set forth in this Section 8
and any additional terms and conditions, not inconsistent with
the express provisions of the Plan, as the Committee shall set
forth in the relevant Award Agreement.
8.2 Performance Unit Grants. A Performance Unit is an
Award of units (with each unit representing such monetary amount
as is designated by the Committee in the Award Agreement) granted
to a Participant, subject to such terms and conditions as the
Committee deems appropriate, including, without limitation, the
requirement that the Participant forfeit such units (or a portion
thereof) in the event certain performance criteria are not met
within a designated period of time.
8.3 Grants. Subject to Section 5 of the Plan,
Performance Units may be granted alone or in addition to any
other Awards under the Plan. Subject to the terms of the Plan,
the Committee shall determine the number of Performance Units to
be granted to a Participant and the Committee may impose
different terms and conditions on any particular Performance
Units granted to any Participant.
8.4 Performance Goals and Performance Periods.
Participants receiving grants of Performance Units shall only
earn into and be entitled to payment in respect of such Awards if
the Company and/or a Division of the Company and/or the
Participant achieves certain performance goals (the "Performance
Goals") during and in respect of a designated performance period
as determined by the Committee (the "Performance Period"). The
Performance Goals and the Performance Period shall be established
by the Committee, in its sole discretion. The Performance
Periods may overlap each other from time to time. The Committee
shall establish Performance Goals for each Performance Period
prior to, or as soon as practicable after, the commencement of
such Performance Period. The Committee shall also establish a
schedule or schedules for such Performance Units setting forth
the portion of the Award which will be earned or forfeited based
on the degree of achievement, or lack thereof, of the Performance
Goals at the end of the relevant Performance Period. In setting
Performance Goals, the Committee may use, but shall not be
limited to, such measures as total shareholder return, return on
equity, return on assets, net earnings per share growth,
comparisons to peer companies, divisional goals, individual or
aggregate Participant performance or such other measure or
measures of performance as the Committee, in its sole discretion,
may deem appropriate. Such performance measures shall be defined
as to their respective components and meaning by the Committee
(in its sole discretion). During any Performance Period, the
Committee shall have the authority to adjust the Performance
Goals in such manner as the Committee, in its sole discretion,
deems appropriate with respect to such Performance Period. In
addition to the Performance Goals, the Committee may also require
a minimum shareholder return (threshold) be attained before
consideration is given to any results achieved on the Performance
Goals. Should the Company, Division and/or Participant achieve
the applicable Performance Goals, but the minimum shareholder
return (threshold) falls below the minimum expectations, then the
Award opportunity may be deferred by the Committee for up to one
(1) or two (2) year(s) until the threshold is exceeded. If the
minimum shareholder return (threshold) is not achieved within the
additional one (1) or two (2) year timeframe, then no Award shall
be paid.
8.5 Payment of Units. With respect to each
Performance Unit, the Participant shall, if the applicable
Performance Goals and minimum shareholder return (threshold) have
been achieved by the Company and/or a Division of the Company
during the relevant Performance Period, be entitled to receive
payment in an amount equal to the designated value of each
Performance Unit times the number of such units so earned.
Payment in settlement of earned Performance Units shall be made
as soon as practical following the conclusion of the respective
Performance Period in cash, in shares of unrestricted Common
Stock or in Restricted Stock, as the Committee in its sole
discretion, shall determine and provide in the relevant Award
Agreement. Should the Company, Division and/or Participant
achieve the applicable Performance Goals, but the minimum
shareholder return (threshold) falls below the minimum
expectations, then the Award opportunity may be deferred by the
Committee for up to one (1) or two (2) year(s) until the
threshold is exceeded. If the minimum shareholder return
(threshold) is not achieved within the additional one (1) or two
(2) year timeframe, then no Award shall be paid.
9. Deferral Elections. The Committee may permit a
Participant to elect to defer receipt of any payment of cash or
any delivery of shares of Common Stock that would otherwise be
due to such Participant by virtue of the exercise, earn out or
settlement of any Award made under the Plan. If any such
election is permitted, the Committee shall establish rules and
procedures for such deferrals, including, without limitation, the
payment or crediting of reasonable interest on such deferred
amounts credited in cash or crediting of dividend equivalents in
respect of deferral credited in units of Common Stock.
10. Termination of Employment.
10.1 General. Subject to the terms and conditions of
Section 13 of the Plan, if, and to the extent, the terms and
conditions under which an Award may be exercised, earned out or
settled after a Participant's termination of employment, or a Non
Employee Director officially leaves the Board, for any particular
reason shall not have been set forth in the relevant Award
Agreement, by and as determined by the Committee in its sole
discretion, the following terms and conditions shall apply as
appropriate and as not inconsistent with the terms and
conditions, if any, of such Award Agreement:
10.1.1 Except as otherwise provided in this
Section 10.1.1, if:
(a) a Participant's employment by the
Company or any of its Subsidiaries is terminated for
any reason, (other than Disability, Retirement or
death) while the shares are non-vested, such
Participant's rights, if any, to exercise any non
vested Stock Options, if any, shall immediately
terminate and the Participant (and such Participant's
estate, designated beneficiary or other legal
representative) shall forfeit any rights or interest in
or with respect to any such Stock Options. In the
event of Disability, Retirement or death while the
Stock Options are non-vested, non-vested Stock Options
shall become vested to the extent determined by the
Committee. The Committee, in its sole discretion, may
determine that such Participant's Stock Options, if
any, to the extent exercisable immediately prior to any
termination of employment (other than a termination due
to death, Retirement or Disability), may remain
exercisable for a specified time period not to exceed
thirty (30) days after such termination (subject to the
applicable terms and provisions of the Plan [and any
rules or procedures thereunder] and the relevant Award
Agreement). If any termination of employment is due to
Retirement or Disability, a Participant shall have the
right, subject to the applicable terms and provisions
of the Plan (and any rules or procedures thereunder)
and the relevant Award Agreement, to exercise such
Stock Options, if any, at any time within one (1) year
period following such termination due to Retirement or
Disability (to the extent such Participant was entitled
to exercise any such Awards immediately prior to such
termination). If any Participant dies while entitled
to exercise a Stock Option, if any, such Participant's
estate, designated beneficiary or other legal
representative, as the case may be, shall have the
right, subject to the applicable provisions of the Plan
(and any rules or procedures thereunder) and the
relevant Award Agreement, to exercise such Stock
Options, if any, at any time within one (1) year from
the date of such Participant's death (but in no event
more than one (1) year from the date of such
Participant's termination due to Retirement or
Disability); or
(b) a Non-Employee Director who resigns from
the Board, or is not reelected, or leaves the Board for
any reason, (other than Disability, Retirement or
death) while the shares are non-vested, such Non
Employee Director's rights, if any, to exercise any non
vested Stock Options, if any, shall immediately
terminate and the Non-Employee Director (and such Non
Employee Director's estate, designated beneficiary or
other legal representative) shall forfeit any rights or
interest in or with respect to any such Stock Options.
In the event of Disability, Retirement or death while
the Stock Options are non-vested, non-vested Stock
Options shall become vested to the extent determined by
the Committee. The Committee, in its sole discretion,
may determine that such Non-Employee Director's Stock
Options, if any, to the extent exercisable immediately
prior to leaving the Board (other than due to death,
Retirement or Disability), may remain exercisable for a
specified time period not to exceed thirty (30) days
after such leaving the Board (subject to the applicable
terms and provisions of the Plan [and any rules or
procedures thereunder] and the relevant Award
Agreement). If leaving the Board is due to Retirement
or Disability, a Non-Employee Director shall have the
right, subject to the applicable terms and provisions
of the Plan (and any rules or procedures thereunder)
and the relevant Award Agreement, to exercise such
Stock Options, if any, at any time within one (1) year
period following such leaving the Board due to
Retirement or Disability (to the extent such Non
Employee Director was entitled to exercise any such
Awards immediately prior to such leaving). If any Non
Employee Director dies while entitled to exercise a
Stock Option, if any, such Non-Employee Director's
estate, designated beneficiary or other legal
representative, as the case may be, shall have the
right, subject to the applicable provisions of the Plan
(and any rules or procedures thereunder) and the
relevant Award Agreement, to exercise such Stock
Options, if any, at any time within one (1) year from
the date of such Non-Employee Director's death (but in
no event more than one (1) year from the date of such
Non-Employee Director's leaving the Board due to
Retirement or Disability).
10.1.2 If a Participant's employment with the
Company or any of its Subsidiaries is terminated for any
reason (other than Disability, Retirement or death) prior to
the satisfaction and/or lapse of the restrictions, terms and
conditions applicable to a grant of Restricted Stock, such
Restricted Award or Awards shall be forfeited, unless the
Committee in its discretion determines otherwise. In the
event of Disability, Retirement or death during the
Restricted Period, shares of Restricted Stock shall become
free of restrictions to the extent determined by the
Committee.
10.1.3 If a Participant's employment with the
Company or any of its Subsidiaries is terminated for any
reason (other than Disability, Retirement or death) prior to
the completion of any Performance Period, such termination
results in the forfeiture of the Performance Unit. If
termination is due to Disability, Retirement or death, the
disposition of the non-vested awards will be determined by
the Committee.
11. Non-transferability of Awards. No Award under the Plan
or any Award Agreement, and no rights or interests herein or
therein, shall or may be assigned, transferred, sold, exchanged,
pledged, disposed of or otherwise hypothecated or encumbered by a
Participant or any beneficiary thereof, except by testamentary
disposition or the laws of descent and distribution. No such
interest shall be subject to seizure for the payment of the
Participant's (or any beneficiary's) debts, judgements, alimony,
or separation maintenance or be transferrable by operation of law
in the event of the Participant's (or any beneficiary's)
bankruptcy or insolvency. During the lifetime of a Participant,
Stock Options are exercisable only by the Participant.
12. Changes in Capitalization and Other Matters.
12.1 No Corporate Action Restriction. The existence of
the Plan, any Award Agreement and/or the Awards granted hereunder
shall not limit, affect or restrict in any way the right or power
of the Board or the shareholders of the Company to make or
authorize (a) any adjustment, recapitalization, reorganization or
other change in the Company's or any Subsidiary's capital
structure or its business, (b) any merger, consolidation or
change in the ownership of the Company or any Subsidiary, (c) any
issue of bonds, debentures, capital, preferred or prior
preference stocks ahead of or affecting the Company's or any
Subsidiary's capital stock or the rights thereof, (d) any
dissolution or liquidation of the Company or any Subsidiary, (e)
any sale or transfer of all or any part of the Company's or any
Subsidiary's assets or business, or (f) any other corporate act
or proceeding by the Company or any Subsidiary. No Participant,
beneficiary or any other person shall have any claim against any
member of the Board or the Committee, the Company or any
Subsidiary as a result of any such action.
12.2 Recapitalization Adjustments. In the event of any
change in capitalization affecting the Common Stock of the
Company, including, without limitation, a stock dividend or other
distribution, stock split, reverse stock split, recapitalization,
merger, acquisition, consolidation, subdivision, split-up, spin
off, split-off, combination or exchange of shares or other form
of reorganization, or any other change affecting the Common
Stock, the Board, in its sole discretion, may authorize and make
such proportionate adjustments, if any, as the Board may deem
appropriate to reflect such change, including, without
limitation, with respect to the aggregate number of shares of the
Common Stock for which Awards in respect thereof may be granted
under the Plan, the maximum number of shares of the Common Stock
which may be sold or awarded to any Participant, any number of
shares of the Common Stock covered by each outstanding Award, and
the exercise price or other price per share of Common Stock in
respect of outstanding Awards.
13. Change in Control.
13.1 Acceleration of Awards Vesting. Except as
otherwise provided in Section 13.2 of the Plan, if a Change in
Control of the Company occurs (a) all Stock Options then
unexercised and outstanding shall become fully exercisable as of
the date of the Change in Control, (b) all restrictions, terms
and conditions applicable to all Restricted Stock then
outstanding shall be deemed lapsed and satisfied as of the date
of the Change in Control, and (c) all Performance Units shall be
deemed to have been fully earned as of the date of the Change in
Control.
13.2 Six-Month Rule. The provisions of Section 13.1 of
the Plan shall not apply to any Award that has been granted and
outstanding for less than six (6) months as of the date of the
Change in Control.
13.3 Payment After Change in Control. Within thirty
(30) days after a Change in Control occurs, (a) the holder of an
Award of Restricted Stock shall receive a new certificate for
such shares without the legend set forth in Section 7.3.2 of the
Plan, and (b) the holder of an Award of Performance Units shall
receive payment of the value of such grants in cash.
13.4 Termination as a Result of a Potential Change in
Control. In determining the applicability of Section 13.1 of the
Plan, if (a) a Participant's employment is terminated by the
Company or any Subsidiary prior to a Change in Control without
Cause at the request of a Person who has entered into an
agreement with the Company the consummation of which will
constitute a Change in Control, or (b) the Participant terminates
his employment with the Company or any Subsidiary for Good Reason
prior to a Change in Control and the circumstance or event which
constitutes Good Reason occurs at the request of the Person
described in Section 13.4(a) of the Plan, then for purposes of
this Section 13, a Change in Control shall be deemed to have
occurred immediately prior to such Participant's termination of
employment.
13.5 Definitions. For purposes of this Section 13, the
following words and phrases shall have the meaning specified:
13.5.1 "Beneficial Owner" shall have the meaning
defined in Rule 13d-3 of the Exchange Act.
13.5.2 "Cause" shall mean, unless otherwise
defined in an employee's individual employment agreement
with the Company or any Subsidiary (in which case such
employment agreement definition shall govern), (a) the
indictment of the Participant for any serious crime, (b) the
willful and continued failure by the Participant to
substantially perform the Participant's duties, as they may
be defined from time to time, with the Participant's primary
employer or to abide by the written policies of the Company
or the Participant's primary employer (other than any such
failure resulting from the Participant's incapacity due to
physical or mental illness), or (c) the willful engaging by
the Participant in conduct which is demonstrably and
materially injurious to the Company or any Subsidiary,
monetarily or otherwise. For purposes of the preceding
sentence, no act shall be considered "willful" unless done,
or omitted to be done, by the Participant not in good faith
and without reasonable belief that such act, or failure to
act, was in the best interests of the Company and its
Subsidiaries.
13.5.3 A "Change in Control" shall be deemed to
have occurred if any one of the following conditions shall
have been satisfied:
(a) any Person becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by
any such Person any securities acquired directly from
the Company) representing twenty-five percent (25%) or
more of the combined voting power of the Company's then
outstanding securities; or
(b) during any period of twenty-four (24)
consecutive months (not including any period prior to
January 1, 1994), individuals who at the beginning of
such period constitute the Board and any new director
(other than a director designated by a Person who has
entered into an agreement with the Company to effect a
transaction described in Sections 13.5.3(a), 13.5.3(c)
or 13.5.3(d)) whose election or nomination for election
to the Board was or is approved of by a vote of at
least two-thirds of the directors at the beginning of
such twenty-four (24) month period or whose election or
nomination for election was previously so approved,
cease for any reason to constitute a majority of the
Board; or
(c) the shareholders of the Company approve
and the action is implemented to merge or consolidate
the Company with any other corporation or a plan of
complete liquidation of the Company, other than a
merger, consolidation or liquidation which would result
in the voting securities of the Company outstanding
immediately prior thereto continuing to represent
(either by remaining outstanding or being converted
into voting securities of the Surviving Entity), in
combination with the ownership of any trustee or other
fiduciary holding securities under any benefit plan of
the Company or any Subsidiary, more than seventy-five
percent (75%) of the combined voting power of the
voting securities of the Company or such Surviving
Entity outstanding immediately after such merger,
consolidation or liquidation; or
(d) the shareholders of the Company approve
an agreement for the sale or disposition by the Company
(other than to a Subsidiary) of all or substantially
all of the Company's assets.
Notwithstanding the foregoing, with respect to a particular
Participant a Change in Control shall not include any event,
circumstance or transaction which results from the action of
any entity or group which includes, is affiliated with, or
is wholly or partly controlled by one or more executive
officers of the Company or any Subsidiary and in which
entity or group the Participant participates.
13.5.4 "Good Reason" for termination by a
Participant of the Participant's employment shall mean, for
purposes of this Section 13, unless otherwise defined in the
Participant's individual employment agreement with the
Company or any Subsidiary (in which case such employment
agreement definition shall govern), the occurrence (without
the Participant's consent) of any one of the following:
(a) the assignment to the Participant of any
duties and/or responsibilities substantially and
significantly inconsistent with the nature and status
of the Participant's duties and/or responsibilities
immediately prior to any Potential Change in Control,
or a substantial and significant adverse alteration in
the nature or status of the employee's duties and/or
responsibilities from those in effect immediately prior
to any such Potential Change in Control; provided,
however, that a redesignation of the Participant's
title shall not under any circumstances constitute Good
Reason if the Participant's overall status among the
Company and its Subsidiaries is not substantially and
significantly adversely affected; or
(b) a reduction in the Participant's rate of
annual base salary is in effect on January 1, 1994, as
the same may be increased from time to time, where
"annual base salary" is the Participant's regular basic
annual compensation prior to any reduction therein
under a salary reduction agreement pursuant to Section
401(k) or Section 125 of the Code, and, without
limitation, shall not include, fees, retainers,
reimbursements, bonuses, incentive awards, prizes or
similar payments.
13.5.5 "Person" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof; provided, however, a
Person shall not include (a) the Company or any Subsidiary,
(b) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a Subsidiary
qualified under Section 401(a) of the Code, (c) an
underwriter temporarily holding securities pursuant to an
offering of such securities, or (d) a corporation owned,
directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of
stock of the Company.
13.5.6 "Potential Change in Control" shall be
deemed to have occurred if any one of the following
conditions shall have been satisfied:
(a) the Company enters into an agreement,
the consummation of which would result in the
occurrence of a Change in Control; or
(b) the Company or any Person publicly
announces an intention to take or to consider taking
actions which, if consummated, would constitute a
Change in Control; or
(c) any Person becomes the Beneficial Owner,
directly or indirectly, of securities of the Company
representing ten percent (10%) or more of the combined
voting power of the Company's then outstanding
securities, or any Person increases such Person's
beneficial ownership of such securities by five (5)
percentage points or more over the percentage so owned
by such Person on January 1, 1994; or
(d) the Board adopts a resolution to the
effect that, for purposes of the Plan, a Potential
Change in Control has occurred.
13.5.7 "Surviving Entity" shall mean only an
entity in which substantially all of the Company's
shareholders immediately before any merger, consolidation or
liquidation become shareholders by the terms of such merger,
consolidation or liquidation.
13.6 Adverse Tax Consequences. If the making of any
payment or payments pursuant to this Section 13 or otherwise
would (a) subject the Participant to an excise tax under Section
4999 of the Code, or any like or successor section thereto, or
(b) result in the Company's loss of a federal income tax
deduction for such payments under Section 280G of the Code, or
any like or successor section thereto (either or both, an
"Adverse Tax Consequence"), then, unless otherwise expressly
provided in a relevant Award Agreement, the payments attributable
to the Plan that are "parachute payments" within the meaning of
such Section 280G of the Code shall be reduced, as determined by
the Committee in its sole discretion, but after consultation with
the Participant affected, to the extent necessary to avoid any
Adverse Tax Consequence. Any disputes regarding whether any
payments to a Participant would result in an Adverse Tax
Consequence shall be resolved by an opinion of nationally
recognized legal counsel selected by the Committee in good faith
(which legal counsel may be Ward and Smith P.A., Attorneys).
14. Amendment, Suspension and Termination.
14.1 In General. The Board may suspend or terminate
the Plan (or any portion thereof) at any time and may amend the
Plan at any time and from time to time in such respects as the
Board may deem advisable to insure that any and all Awards
conform to or otherwise reflect any change in applicable laws or
regulations, or to permit the Company or the Participants to
benefit from any change in applicable laws or regulations, or in
any other respect the Board may deem to be in the best interests
of the Company or any Subsidiary; provided, however, that no
such amendment shall, without majority (or such greater
percentage if required by law, charter, by-law or other
regulation or rule) stockholder approval to the extent required
by law or the rules of any exchange upon which the Common Stock
is listed, (a) except as provided in Section 12 of the Plan,
materially increase the number of shares of Common Stock which
may be issued under the Plan, (b) materially modify the
requirements as to eligibility for participation in the Plan, (c)
materially increase the benefits accruing to Participants under
the Plan, or (d) extend the termination date of the Plan. No
such amendment, suspension or termination shall (i) materially
adversely affect the rights of any Participant under any
outstanding Stock Options, Performance Units, or Restricted Stock
grants, without the consent of such Participant, or (ii) make any
change that would disqualify the Plan, or any other plan of the
Company or any Subsidiary intended to be so qualified, from (A)
the exemption provided by Rule 16b-3, promulgated under the
Exchange Act, or any successor rule or regulation to such Rule
16b-3, as such rule is applicable from time to time, or (B) the
benefits provided under Section 422 of the Code, or any successor
thereto.
14.2 Award Agreements. The Committee may amend or
modify at any time and from time to time any outstanding Stock
Options, Performance Units, or Restricted Stock grants, in any
manner to the extent that the Committee would have had the
authority under the Plan to initially determine the restrictions,
terms and provisions of such Stock Options, Performance Units,
and/or Restricted Stock grants, including, without limitation, to
change the date or dates as of which such Options may be
exercised. No such amendment or modification shall, however,
materially adversely affect the rights of any Participant under
any such Award without the consent of such Participant.
15. Miscellaneous.
15.1 Tax Withholding. The Company shall have the right
to deduct from any payment or settlement under the Plan,
including, without limitation, the exercise of any Stock Option,
or the delivery or vesting of any shares of Common Stock,
Restricted Stock, any federal, state, local or other taxes of any
kind which the Committee, in its sole discretion, deems necessary
to be withheld to comply with the Code and/or any other
applicable law, rule or regulation. If the Committee, in its
sole discretion, permits shares of Common Stock to be used to
satisfy any such tax withholding, such Common Stock shall be
valued based on the Fair Market Value of such stock as of the
date the tax withholding is required to be made, such date to be
determined by the Committee. The Committee may establish rules
limiting the use of Common Stock to meet withholding requirements
by Participants who are subject to Section 16 of the Exchange
Act.
15.2 No Right to Employment. Neither the adoption of
the Plan, the granting of any Award, nor the execution of any
Award Agreement, shall confer upon any employee of the Company or
any Subsidiary any right to continued employment with the Company
or any Subsidiary, as the case may be, nor shall it interfere in
any way with the right, if any, of the Company or any Subsidiary
to terminate the employment of any employee at any time for any
reason.
15.3 Unfunded Plan. The Plan shall be unfunded and the
Company shall not be required to segregate any assets in
connection with any Awards under the Plan. Any liability of the
Company to any person with respect to any Award under the Plan or
any Award Agreement shall be based solely upon the contractual
obligations that may be created as a result of the Plan or any
such Award or agreement. No such obligation of the Company shall
be deemed to be secured by any pledge of, encumbrance on, or
other interest in, any property or asset of the Company or any
Subsidiary. Nothing contained in the Plan or any Award Agreement
shall be construed as creating in respect of any Participant (or
beneficiary thereof or any other person) any equity or other
interest of any kind in any assets of the Company or any
Subsidiary or creating a trust of any kind or a fiduciary
relationship of any kind between the Company, any Subsidiary
and/or any such Participant, any beneficiary or any other person.
15.4 Payments to a Trust. The Committee is authorized
to cause to be established a trust agreement or several trust
agreements or similar arrangements from which the Committee may
make payments of amounts due or to become due to any Participants
under the Plan.
15.5 Other Company Benefit and Compensation Programs.
Payments and other benefits received by a Participant under an
Award made pursuant to the Plan shall not be deemed a part of a
Participant's compensation for purposes of the determination of
benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Company or any Subsidiary
unless expressly provided in such other plans or arrangements, or
except where the Board expressly determines in writing that
inclusion of an Award or portion of an Award should be included
to accurately reflect competitive compensation practices or to
recognize that an Award has been made in lieu of a portion of
competitive annual base salary or other cash compensation.
Awards under the Plan may be made in addition to, in combination
with, or as alternatives to, grants, awards or payments under any
other plans or arrangements of the Company or its Subsidiaries.
The existence of the Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation plans or programs
and additional compensation arrangements as it deems necessary to
attract, retain and motivate employees.
15.6 Listing, Registration and Other Legal Compliance.
No shares of the Common Stock shall be issued under the Plan
unless legal counsel for the Company shall be satisfied that such
issuance will be in compliance with all applicable federal and
state securities laws and regulations and any other applicable
laws or regulations. The Committee may require, as a condition
of any payment or share issuance, that certain agreements,
undertakings, representations, certificates, and/or information,
as the Committee may deem necessary or advisable, be executed or
provided to the Company to assure compliance with all such
applicable laws or regulations. Certificates for shares of the
Restricted Stock and/or Common Stock delivered under the Plan may
be subject to such stock-transfer orders and such other
restrictions as the Committee may deem advisable under the rules,
regulations, or other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Common Stock is
then listed, and any applicable federal or state securities law.
The Committee may cause a legend or legends to be put on any such
share certificates to make appropriate reference to such
restrictions. In addition, if, at any time specified herein (or
in any Award Agreement) for (a) the making of any determination,
(b) the issuance or other distribution of Restricted Stock and/or
Common Stock, or (c) the payment of amounts to or through a
Participant with respect to any Award, any law, rule, regulation
or other requirement of any governmental authority or agency
shall require either the Company, any Subsidiary or any
Participant (or any designated beneficiary or other legal
representative) to take any action in connection with any such
determination, any such shares to be issued or distributed, any
such payment, or the making of any such determination, as the
case may be, shall be deferred until such required action is
taken. If at any time and from time to time the Committee
determines, in its sole discretion, that the listing,
registration or qualification of any Award, or any Common Stock
or property covered by or subject to such Award, upon any
securities exchange or under any foreign, federal, state or local
securities or other law, rule or regulation is necessary or
desirable as a condition to or in connection with the granting of
such Award or the issuance or delivery of Restricted Stock and/or
Common Stock or other property under such Award or otherwise, no
such Award may be exercised or settled, or paid in Restricted
Stock, Common Stock or other property, unless such listing,
registration or qualification shall have been effected free of
any conditions that are not acceptable to the Committee.
15.7 Award Agreements. Each Participant receiving an
Award under the Plan shall enter into an Award Agreement with the
Company in a form specified by the Committee. Each such
Participant shall agree to the restrictions, terms and conditions
of the Award set forth therein.
15.8 Designation of Beneficiary. Each Participant to
whom an Award has been made under the Plan may designate a
beneficiary or beneficiaries to receive any payment which under
the terms of the Plan and the relevant Award Agreement may become
payable on or after the Participant's death. At any time, and
from time to time, any such designation may be changed or
canceled by the Participant without the consent of any such
beneficiary. Any such designation, change or cancellation must
be on a form provided for that purpose by the Committee and shall
not be effective until received by the Committee. If no
beneficiary has been named by a deceased Participant, or if the
designated beneficiaries have predeceased the Participant, the
beneficiary shall be the Participant's estate. If the
Participant designates more than one beneficiary, any payments
under the Plan to such beneficiaries shall be made in equal
shares unless the Participant has expressly designated otherwise,
in which case the payments shall be made in the shares designated
by the Participant.
15.9 Leaves of Absence/Transfers. The Committee shall
have the power to promulgate rules and regulations and to make
determinations, as it deems appropriate, under the Plan in
respect of any leave of absence from the Company or any
Subsidiary granted to a Participant. Without limiting the
generality of the foregoing, the Committee may determine whether
any such leave of absence shall be treated as if the Participant
has terminated employment with the Company or any such
Subsidiary. If a Participant transfers within the Company, or to
or from any Subsidiary, such Participant shall not be deemed to
have terminated employment as a result of such transfers.
15.10 Governing Law. The Plan and all actions
taken thereunder shall be governed by and construed in accordance
with the laws of the State of North Carolina, without regard to
principles of conflict of laws. Any titles and headings herein
are for reference purposes only, and shall in no way limit,
define or otherwise affect the meaning, construction or
interpretation of any provisions of the Plan.
15.11 Effective Date. The Plan shall be effective
as of January 1, 1994, subject to approval by a majority of the
Company's shareholders at the 1994 annual meeting of shareholders
or any proper adjournment thereof.
