As filed with the Securities and Exchange Commission on May 12, 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)
_________________________
1993 NONSTATUTORY STOCK OPTION PLAN
FOR GRAHAM SAVINGS BANK, INC., SSB
(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 Maximum Maximum Amount of
Securities to Amount to be Offering Price Aggregate Registration
be Registered Registered Per Share Offering Price Fee (1)
Common Stock,
$5 par value 36,582 $37.25 $1,362,680 $469.85
(1) The shares of Common Stock are being offered to eligible directors of
Registrant and its direct and indirect subsidiaries pursuant to options
granted to them in accordance with the terms of Registrant's 1993
Nonstatutory Stock Option Plan for Graham Savings Bank, Inc., SSB
(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 price at which the shares may be purchased pursuant
to the Plan upon the exercise of the options.
<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;
(ii) Registrant's Current Report on Form 8-K dated
March 14, 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
<PAGE>
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 breeches 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).
<PAGE>
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 1993 Nonstatutory Stock Option Plan for Graham
Savings Bank, Inc., SSB (filed herewith).
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.
<PAGE>
(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.
(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 May 11, 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 May 11, 1994
Ernest C. Roessler Director
(Principal
Executive
Officer)
/s/ W. Harold Parker, Jr. Senior Vice May 11, 1994
W. Harold Parker, Jr. President and
Controller
(Principal
Financial and
Accounting
Officer)
*/s/ W. L. Burns, Jr. Chairman of May 11, 1994
W. L. Burns, Jr. the Board
J. Harper Beall, III Director ___________, 1994
*/s/ James B. Brame, Jr. Director May 11, 1994
James B. Brame, Jr.
*/s/ Timothy B. Burnett Director May 11, 1994
Timothy B. Burnett
*/s/ Arthur W. Clark Director May 11, 1994
Arthur W. Clark
*/s/ Kinsley van R. Dey, Jr. Director May 11, 1994
Kinsley van R. Dey, Jr.
<PAGE>
*/s/ Frances Hill Fox Director May 11, 1994
Frances Hill Fox
T. E. Haigler, Jr. Director ___________, 1994
*/s/ George R. Herbert Director May 11, 1994
George R. Herbert
Edward S. Holmes Director ___________, 1994
Owen G. Kenan Director ___________, 1994
Eugene J. McDonald Director ___________, 1994
Hamilton W. McKay, Jr., M.D. Director ___________, 1994
*/s/ Eric B. Munson Director May 11, 1994
Eric B. Munson
John B. Stedman Director ___________, 1994
H. Allen Tate, Jr. Director ___________, 1994
*/s/ Phail Wynn, Jr. Director May 11, 1994
Dr. Phail Wynn, Jr.
By:/s/ W. Harold Parker, Jr.
W. Harold Parker, Jr., Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit
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 1993 Nonstatutory Stock Option
Plan for Graham Savings Bank, Inc., SSB
May 6, 1994
Board of Directors
CCB Financial Corporation
111 Corcoran Street
Durham, North Carolina 27701
RE: 1993 Nonstatutory Stock Option Plan for
Graham Savings Bank, Inc., SSB
Our File 93R0034(A)
Gentlemen:
We have acted as special counsel to CCB Financial Corporation
("CCB") in connection with the adoption of CCB's 1993 Nonstatutory
Stock Option Plan for Graham Savings Bank, Inc., SSB (the "Plan")
and the potential issuance by CCB of up to 36,582 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 and 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\3657
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 1993 Nonstatutory Stock Option Plan for
Graham Savings Bank, Inc., SSB.
KPMG PEAT MARWICK
Raleigh, North Carolina
May 6, 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,
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 1993 Nonstatutory Stock Option Plan and the
1993 Management Recognition Plan for Graham Savings Bank, Inc., SSB
adopted by CCB Financial Corporation for the benefit of the
directors and employees of certain of 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: May 11, 1994
<PAGE>
Signature Title Date
/s/ Ernest C. Roessler President and May 11, 1994
Ernest C. Roessler Director
(Principal
Executive
Officer)
/s/ W. Harold Parker, Jr. Senior Vice May 11, 1994
W. Harold Parker, Jr. President and
Controller
(Principal
Financial and
Accounting
Officer)
/s/ W. L. Burns, Jr. Chairman of May 11, 1994
W. L. Burns, Jr. the Board
J. Harper Beall, III Director ________, 1994
/s/ James B. Brame, Jr. Director May 11, 1994
James B. Brame, Jr.
/s/ Timothy B. Burnett Director May 11, 1994
Timothy B. Burnett
/s/ Arthur W. Clark Director May 11, 1994
Arthur W. Clark
/s/ Kinsley van R. Dey Director May 11, 1994
Kinsley van R. Dey
/s/ Frances Hill Fox Director May 11, 1994
Frances Hill Fox
T. E. Haigler, Jr. Director ________, 1994
/s/ George R. Herbert Director May 11, 1994
George R. Herbert
Edward S. Holmes Director ________, 1994
Owen G. Kenan Director ________, 1994
Eugene J. McDonald Director ________, 1994
Hamilton W. McKay, Jr., M.D. Director ________, 1994
/s/ Eric B. Munson Director May 11, 1994
Eric B. Munson
John B. Stedman Director ________, 1994
H. Allen Tate, Jr. Director ________, 1994
/s/ Phail Wynn, Jr. Director May 11, 1994
Dr. Phail Wynn, Jr.
CCB FINANCIAL CORPORATION
1993 NONSTATUTORY STOCK OPTION PLAN
FOR GRAHAM SAVINGS BANK, INC., SSB
CCB Financial Corporation, a North Carolina corporation
(hereinafter referred to as the "Corporation"), does herein set
forth the terms of the 1993 Nonstatutory Stock Option Plan for
Graham Savings Bank, Inc., SSB (hereinafter referred to as this
"Plan"), which was adopted by the Board of Directors of the
Corporation (hereinafter referred to as the "Corporate Board").
1. Purpose of this Plan. The purpose of this Plan is to
provide for the grant of Nonstatutory Stock Options (hereinafter
referred to as "Options" or singularly, "Option") and in certain
circumstances the right to surrender such Options for cash, to
Directors (as hereinafter defined) of certain of its subsidiary
corporations, who wish to invest in the Corporation's common stock,
par value $5.00 per share (hereinafter referred to as "Common
Stock"). The Corporate Board believes that participation in the
ownership of the Corporation by Directors will be to the mutual
benefit of the Corporation and its subsidiaries and the Directors.
In addition, the existence of this Plan will make it possible for
the Corporation and its subsidiaries to attract capable individuals
to serve on the Board of Directors of its subsidiaries. As used
herein, the term "Directors" or singularly, "Director", shall mean
those members of the Board of Directors of Graham Savings
Bank, Inc., SSB (hereinafter the "Savings Bank") who do not
participate in the 1993 Incentive Stock Option Plan of the
Corporation as of the date of the Conversion (as hereinafter
defined). Further, should the Savings Bank at any time after the
effective date of the Conversion be merged or consolidated with and
into any other subsidiary of the Corporation, the "Board of
Directors" shall include the advisory board of directors of the
Graham, North Carolina branch office of the holding company
subsidiary with which the Savings Bank is merged or consolidated.
2. Administration of this Plan.
(a) This Plan shall be administered by the Compensation
Committee of the Corporate Board (hereinafter the "Committee").
The Committee shall have full power and authority to construe,
interpret and administer this Plan. All actions, decisions,
determinations, or interpretations of the Committee shall be final,
conclusive, and binding upon all parties.
(b) The Committee shall determine when Limited Stock
Appreciation Rights (as hereinafter described) shall be available
in place of outstanding Options.
(c) The Committee may designate any officers or
employees of the Corporation or of any of its subsidiaries to
assist in the administration of this Plan. The Committee may
authorize such individuals to execute documents on its behalf and
may delegate to them such other ministerial and limited
discretionary duties as the Committee may see fit.
3. Shares of Common Stock Subject to this Plan. The maximum
number of shares of Common Stock that shall be offered under this
Plan is thirty-six thousand five hundred and eighty-two (36,582)
shares, subject to adjustment as provided in paragraph 13. Shares
subject to Options which expire or terminate prior to the issuance
of the shares of Common Stock shall lapse and the shares of Common
Stock originally subject to such Options shall again be available
for future grants of Options under this Plan.
4. Eligibility; Grant of Options. Upon the conversion of
Graham Savings Bank, SSB, (hereinafter referred to as the "Bank")
from a North Carolina-chartered mutual savings bank to a North
Carolina-chartered stock savings bank and simultaneous acquisition
of the Bank by the Corporation (herein referred to as the
"Conversion"), each Director then serving on the Board of Directors
of the Bank shall be allocated an Option to purchase shares of
Common Stock in the amount set forth below:
Forrest C. Hall . . . . . . . . . . 3,630 Shares
Sarah G. Johnston . . . . . . . . . 10,332 Shares
A. C. Motsinger . . . . . . . . . . 11,730 Shares
J. Worth Rich. . . . . . . . . 3,630 Shares
William R. Sizemore . . . . . . . . . 3,630 Shares
James R. Guthrie . . . . . . . . . . 3,630 Shares
TOTAL. . . . . . . . . . . . . . 36,582 Shares
5. Option Price.
(a) The price per share of each Option granted under
this Plan (hereinafter called the "Option Price") shall be
determined by the Committee as of the effective date of grant of
such Option, but in no event shall such Option Price be less than
the greater of (i) 100% of the fair market value of Common Stock on
the date of grant or (ii) the par value of Common Stock. An Option
shall be considered as granted on the effective date of the
Conversion.
(b) The fair market value of a share of Common Stock
shall be determined as follows: (i) if on the date as of which
such determination is being made, Common Stock being valued is
admitted to trading on a securities exchange or exchanges for which
actual sale prices are regularly reported, or actual sale prices
are otherwise regularly published, the fair market value of a share
of Common Stock shall be deemed to be equal to the mean of the
closing sale price as reported for each of the five (5) trading
days immediately preceding the date as of which such determination
is made; provided, however, that, if a closing sale price is not
reported for each of the five (5) trading days immediately
preceding the date as of which such determination is made, then the
fair market value shall be equal to the mean of the closing sale
prices on those trading days for which such price is available, or
(ii) if on the date as of which such determination is made, no such
closing sale prices are reported, but quotations for Common Stock
being valued are regularly listed on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or another
comparable system, the fair market value of a share of Common Stock
shall be deemed to be equal to the mean of the average of the
closing bid and asked prices for such Common Stock quoted on such
system on each of the five (5) trading days preceding the date as
of which such determination is made, but if a closing bid and asked
price is not available for each of the five (5) trading days, then
the fair market value shall be equal to the mean of the average of
the closing bid and asked prices on those trading days during the
five-day period for which such prices are available, or (iii) if no
such quotations are available, the fair market value of a share of
Common Stock shall be deemed to be the average of the closing bid
and asked prices furnished by a professional securities dealer
making a market in such shares, as selected by the Committee, for
the trading date first preceding the date as of which such
determination is made. If the Committee determines that the price
as determined above does not represent the fair market value of a
share of Common Stock, the Committee may then consider such other
factors as it deems appropriate and then fix the fair market value
for the purposes of this Plan.
6. Payment of Option Price. Payment for shares subject to
an Option may be made either in cash, or with the approval of the
Committee, in other stock of the Corporation owned by an Director
or such other person as may be entitled to exercise such Option.
Any shares of the Corporation's stock that are delivered in payment
of the aggregate Option Price shall be valued at their fair market
value, as determined by the Committee, on the date of the exercise
of such Option.
7. Terms and Conditions of Grant of Options.
(a) Each Option granted pursuant to this Plan shall be
evidenced by a written Nonstatutory Stock Option Agreement
(hereinafter referred to as "Option Agreement") with each Director
(hereinafter referred to as "Optionee") to whom an Option is
granted; such agreement shall be substantially in the form attached
hereto as "Exhibit A", unless the Committee shall adopt a different
form and, in each case, may contain such other, different, or
additional terms and conditions as the Committee may determine.
(b) Options granted under this Plan shall vest and the
right of an Optionee to the Options shall be nonforfeitable in
accordance with the following schedule:
Date When Such Options Percentage of Such
Become Vested Options Vested
Effective Date of Grant of Options 20%
First Anniversary of Effective Date 20%
Second Anniversary of Effective Date 20%
Third Anniversary of Effective Date 20%
Fourth Anniversary of Effective Date 20%
(c) In determining the number of shares vested under the
above vesting schedules, an Optionee shall not receive fractional
shares. If the product resulting from multiplying the vested
percentage times the allocated shares results in a fractional
share, then an Optionee's vested right shall be to the whole number
of shares disregarding any fractional share.
(d) In the event any Optionee to whom Options are
awarded under this Plan terminates membership on the Board of
Directors or employment with the Corporation or any subsidiary of
the Corporation for any reason, other than as provided in
subparagraphs 7(e) and 7(f) below, and such Optionee does not have
a 100% vested interest in his or her shares under this Plan, then
any shares under the Option which are not vested, based upon the
applicable schedule in subparagraph 7(b) above, shall be forfeited
and shall be available again for distribution to such Optionees as
may be determined by the Committee.
(e) In the event that the membership of an Optionee on
the Board of Directors should terminate because of such Optionee's
retirement, disability, or death or failure of the Corporation to
elect an Optionee for service as a member of the Board of Directors
for other than Cause prior to the date when all shares under the
Option allocated to him or her would be 100% vested in accordance
with the applicable schedule in subparagraph 7(b) above, then,
notwithstanding the foregoing schedules in subparagraph 7(b) above,
all shares under the Option allocated to such Optionee shall
immediately become fully vested and nonforfeitable. For purposes
of this Plan, the term "retirement" shall mean (i) with respect to
Optionees who are employees of the Corporation or of any of its
subsidiaries, (A) simultaneously with or subsequent to the
termination of the Optionee's employment under conditions which
would constitute retirement under any tax qualified retirement plan
maintained by the Corporation or by any of its subsidiaries or
(B) attaining age 65; (ii) with respect to Optionees who are not
employees of the Corporation or of any of its subsidiaries, at any
time after attaining age 65 with the approval of the Committee; or
(iii) at the election of a Optionee, at any time after not less
than five (5) years service as a member of the Board of Directors
of the Bank or the Savings Bank, such service being computed
cumulatively for purposes of this clause (iii). For purposes of
this Plan, the term "disability" shall (i) with respect to any
Optionee who is also an employee of the Corporation or of any of
its subsidiaries, be defined in the same manner as such term is
defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended, and (ii) with respect to any other Optionee, as may be
defined by the Committee from time to time, or as may be determined
by the Committee at any time with respect to any individual
Optionee. For purposes of this Plan, the term "Cause" shall refer
to (i) the commission of an act of fraud, embezzlement, theft or
proven dishonesty, or any other illegal act or practice (whether or
not resulting in criminal prosecution or conviction but excepting
minor traffic and similar violations in the nature of a
misdemeanor); or (ii) the willful engaging in misconduct which is
deemed by the Corporation, in good faith, to be materially
injurious to the Corporation, monetarily or otherwise; or (iii) the
conviction of a felony; or (iv) the willful and continued failure
or habitual neglect to attend meetings of the Board of Directors
(other than any failure or neglect caused by or resulting from
disability); provided, however, that no act or failure to act shall
be deemed to be "willful" unless done or omitted to be done not in
good faith and without reasonable belief that such action or
omission was in the best interest of the Corporation.
(f) In the event of a "change in control" of the
Corporation, then, notwithstanding the foregoing schedules in
subparagraph 7(b) above, all shares under the Option awarded to
Optionees shall immediately become fully vested. Written notice
that a change in control has occurred shall be given by the
Committee to each Optionee. When used in this Plan, the phrase
"change in control" refers to (i) the acquisition by any person,
group of persons or entity of the beneficial ownership or power to
vote more than twenty (20%) percent of the Corporation's
outstanding stock or (ii) during any period of two (2) consecutive
years, a change in the majority of the Corporate Board, unless the
election of each new Director was approved by at least two-thirds
of the Directors then still in office who were Directors at the
beginning of the two (2) year period.
8. Option Period. Each Option Agreement shall set forth a
period during which such Option may be exercised (hereinafter
referred to as the "Option Period"); provided, however, that the
Option Period shall not exceed ten (10) years after the date of
grant of such Option as specified in an Option Agreement.
9. Change of Control; Limited Stock Appreciation Rights.
(a) In connection with the grant of any Option under
this Plan, the Committee may, in its discretion, provide an
Optionee with the right (herein sometimes referred to as "Limited
Stock Appreciation Rights"), following a "change in control" of the
Corporation and without regard to any restrictions on exercise that
would otherwise apply, to surrender any unexercised portion of such
Option as such Optionee then may have for a cash payment equal to
the amount by which the fair market value (as determined by the
Committee) of the number of shares of Common Stock then subject to
such Option exceeds the aggregate Option Price therefor.
(b) Limited Stock Appreciation Rights shall be exercised
by written notice to the Corporation as provided in paragraph 10
hereof at any time prior to the earlier of (i) the date which is
thirty (30) days after the date of notice of a change in control is
given by the Committee to the Optionee or (ii) the last day of the
Option Period provided for in an Option Agreement, but in no event
shall the expiration date be more than ten (10) years after the
date of grant of an Option as provided in paragraph 8 above.
(c) Limited Stock Appreciation Rights may be exercised
only when the market value of Common Stock subject to an Option
exceeds the aggregate Option Price determined as provided in
paragraph 5 above.
10. Exercise of Options. An Option or the right to surrender
an Option for cash as provided in paragraph 9 hereof shall be
exercised by written notice to the Committee signed by an Optionee
or by such other person as may be entitled to exercise such Option
or to surrender such Option. In the case of the exercise of an
Option, the aggregate Option Price for the shares being purchased
may be paid either in cash or, with the approval of the Committee,
in shares of the Corporation's stock (valued as determined by the
Committee as of the date of exercise) or any combination thereof
and the notice of exercise shall specify how payment will be made.
The written notice shall state the number of shares with respect to
which an Option is being exercised or surrendered and, in the case
of the exercise of an Option, shall either be accompanied by the
payment of the aggregate Option Price for such shares or shall fix
a date (not more than ten (10) business days after the date of such
notice) by which the payment of the aggregate Option Price will be
made. An Optionee shall not exercise an Option to purchase less
than 100 shares, unless the Committee otherwise approves or unless
the partial exercise is for the remaining shares available under
such Option. A certificate or certificates for the shares of
Common Stock purchased by the exercise of an Option shall be issued
in the regular course of business subsequent to the exercise of
such Option and the payment therefor. During the Option Period, no
person entitled to exercise any Option granted under this Plan
shall have any of the rights or privileges of a shareholder with
respect to any shares of Common Stock issuable upon exercise of
such Option, until certificates representing such shares shall have
been issued and delivered and the individual's name entered as a
shareholder of record on the books of the Corporation for such
shares.
11. Effect of Leaving the Board or Death.
(a) In the event that an Optionee leaves the Board of
Directors of the Savings Bank for any reason other than failure to
be reappointed to such Board of Directors for other than Cause (as
defined herein), retirement, disability, or death, any Option
granted to the Optionee under this Plan, to the extent not
previously exercised or surrendered by the Optionee or expired,
shall immediately terminate; provided, however, that an Optionee
who leaves the Board of Directors of the Savings Bank at the
request of such Board of Directors for other than Cause, may be
exempted from the operation of the foregoing provision by a
majority vote of the Committee. "Cause" shall refer to (i) the
commission of an act of fraud, embezzlement, theft or proven
dishonesty or any other illegal act or practice (whether or not
resulting in criminal prosecution or conviction but excepting minor
traffic and similar violations in the nature of a misdemeanor); or
(ii) the willful engaging in misconduct which is deemed by the
Corporation, in good faith, to be materially injurious to the
Corporation, monetarily or otherwise; or (iii) the conviction of a
felony; or (iv) the willful and continued failure or habitual
neglect to attend meetings of the Board of Directors (other than
failure or neglect caused by or resulting from disability);
provided, however, that no act or failure to act shall be deemed to
be "willful" unless done or admitted to be done not in good faith
and without reasonable belief that such action or omission was in
the best interest of the Corporation.
(b) In the event that an Optionee should leave the Board
of Directors as a result of such Optionee's retirement or failure
to be reappointed to such Board of Directors for other than Cause,
such Optionee shall have the right to exercise an Option granted to
him or her under this Plan, to the extent that it has not
previously been exercised or surrendered by the Optionee or
expired, for such period of time as may be determined by the
Committee and specified in an Option Agreement, but in no event may
any Option or the right to surrender any Option for cash be
exercised later than the end of the Option Period provided in the
Option Agreement in accordance with paragraph 8 hereof.
Notwithstanding any other provision contained herein, or in any
Option Agreement, upon retirement or failure to be reappointed for
other than Cause, any Option then held by an Optionee shall be
exercisable immediately in full.
(c) In the event that an Optionee should leave the Board
of Directors by reason of such Optionee's disability, such Optionee
shall have the right to exercise an Option granted to him or her
under this Plan, to the extent that it has not previously been
exercised or surrendered by the Optionee or expired, for such
period of time as may be determined by the Committee and specified
in an Option Agreement, but in no event may any Option or the right
to surrender any Option for cash be exercised later than the end of
the Option Period provided in the Option Agreement in accordance
with paragraph 8 hereof. Notwithstanding any other provision
contained herein, or in any Option Agreement, upon leaving by
reason of disability, any Option then held by an Optionee shall be
exercisable immediately in full.
(d) In the event that an Optionee should die while
serving on the Board of Directors or after his or her retirement or
after his or her leaving by reason of disability during the Option
Period provided in an Option Agreement in accordance with
paragraph 8 hereof, an Option granted to the Optionee under this
Plan, to the extent that it has not previously been exercised or
surrendered by the Optionee or expired, shall vest and shall be
exercisable, in accordance with its terms, by the personal
representative of such Optionee, the executor or administrator of
such Optionee's estate, or by any person or persons who acquired
such Option by bequest or inheritance from such Optionee,
notwithstanding any limitations placed on the exercise of such
Option by this Plan or an Option Agreement, at any time within
twelve (12) months after the date of death of such Optionee, but in
no event may an Option or the right to surrender an Option for cash
be exercised later than the end of the Option Period provided in an
Option Agreement in accordance with paragraph 8 hereof. Any
references herein to an Optionee shall be deemed to include any
person entitled to exercise an Option after the death of such
Optionee under the terms of this Plan.
12. Effect of Plan on Status as Member of a Board. The fact
that a Director has been granted an Option under this Plan shall
not confer on such Director any right to continued service on the
Board of Directors, nor shall it limit the right of the Corporation
or of any of its subsidiaries to remove such Director from the
Board of Directors at any time.
13. Adjustment Upon Changes in Capitalization; Dissolution or
Liquidation.
(a) In the event of a change in the number of shares of
Common Stock outstanding by reason of a stock dividend, stock
split, recapitalization, reorganization, merger, exchange of
shares, or other similar capital adjustment prior to the
termination of an Optionee's rights under this Plan, equitable
proportionate adjustments shall be made by the Committee in (i) the
number and kind of shares which remain available under this Plan
and (ii) the number, kind, and the Option Price of shares subject
to the unexercised portion of an Option under this Plan. The
adjustments to be made shall be determined by the Committee and
shall be consistent with such change or changes in the
Corporation's total number of outstanding shares; provided,
however, that no adjustment shall change the aggregate Option Price
for the exercise of Options granted under this Plan.
(b) The grant of Options under this Plan shall not
affect in any way the right or power of the Corporation or its
shareholders to make or authorize any adjustment, recapitalization,
reorganization, or other change in the Corporation's capital
structure or its business, or any merger or consolidation of the
Corporation, or to issue bonds, debentures, preferred or other
preference stock ahead of or affecting Common Stock or the rights
thereof, or the dissolution or liquidation of the Corporation, or
any sale or transfer of all or any part of the Corporation's assets
or business.
(c) Upon the effective date of the dissolution or
liquidation of the Corporation, or of a reorganization, merger, or
consolidation of the Corporation with one or more other
corporations in which the Corporation is not the surviving
corporation, or the transfer of all or substantially all of the
assets or shares of the Corporation to another person or entity
(any such transaction being hereinafter referred to as a
"Terminating Event"), this Plan and any Options granted hereunder,
including the right to surrender such Options for cash as provided
in paragraph 9 hereof, shall terminate unless provision is made in
writing in connection with such Terminating Event for the
continuance of this Plan and for the assumption of Options granted
hereunder, or the substitution for such Options of new options for
the shares of the successor corporation, or a parent or a
subsidiary thereof, with such appropriate adjustments as may be
determined or approved by the Committee, or the successor to the
Corporation, to the number and kind of shares subject to such
substituted options in which event this Plan and Options granted
hereunder, or the new options substituted therefore, shall continue
in the manner and under the terms so provided. Upon the occurrence
of any Terminating Event in which provision is not made for the
continuance of this Plan and for the assumption of Options granted
hereunder, or the substitution for such Options of new options for
the shares of a successor corporation or a parent or a subsidiary
thereof, each Optionee to whom an Option has been granted under
this Plan (or such person's personal representative, the executor
or administrator of such person's estate, or any person who
acquired the right to exercise such Option from such person by
bequest or inheritance) shall be entitled, prior to the effective
date of any such Terminating Event, (i) to exercise, in whole or in
part, his or her rights under any Option granted to the Optionee
without any regard to any restrictions on exercise that would
otherwise apply, or (ii) to surrender any such Option to the
Corporation in exchange for receipt of cash equivalent to the
amount by which the fair market value of the shares of Common Stock
such person would have received had the Optionee exercised his or
her Option in full immediately prior to consummation of such
Terminating Event exceeds the applicable aggregate Option Price.
To the extent that a person, pursuant to this subparagraph 11(c)
has a right to exercise or surrender any Option on account of a
Terminating Event which that person otherwise would not have had at
that time, such right shall be contingent upon the consummation of
such Terminating Event.
14. Non-Transferability. An Option granted under this Plan
shall not be assignable or transferable except, in the event of the
death of an Optionee, by will or by the laws of descent and
distribution. In the event of the death of an Optionee, the
Optionee's personal representative, the executor or the
administrator of such Optionee's estate, or the person or persons
who acquired by bequest or inheritance the rights to exercise or to
surrender such Options, may exercise or surrender any Option or
portion thereof to the extent not previously exercisable or
surrendered by an Optionee or expired, in accordance with its
terms, prior to the expiration of the exercise period as specified
in subparagraph 11(d) hereof.
15. Tax Withholding. The Corporation or any of its
subsidiaries shall have the right to deduct or otherwise effect a
withholding of any amount required by federal or state laws to be
withheld with respect to the grant, exercise or surrender for cash
of any Option or the sale of stock acquired upon the exercise of an
Option in order for the Corporation or any of its subsidiaries to
obtain a tax deduction otherwise available as a consequence of such
grant, exercise, surrender for cash, or sale, as the case may be.
16. Listing and Registration of Option Shares. The
Corporation shall register the Options and Common Stock issued
under this Plan under the Securities Act of 1933. Any Option
granted under this Plan shall be subject to the requirement that if
at any time the Committee shall determine, in its discretion, that
any additional listing, registration, or qualification of the
shares covered thereby upon any securities exchange or under any
state or federal law or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in
connection with, the granting of such Option or the issuance or
purchase of shares thereunder, such Option may not be exercised in
whole or in part unless and until such listing, registration,
qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee;
provided, however, that the Corporation shall take reasonable steps
to effect such listing, registration, qualification, consent or
approval.
17. Exculpation and Indemnification. In connection with this
Plan, no member of the Committee shall be personally liable for any
act or omission to act in his or her capacity as a member of the
Committee, nor for any mistake in judgment made in good faith,
unless arising out of, or resulting from, such person's own bad
faith, gross negligence, willful misconduct, or criminal acts. To
the extent permitted by applicable law and regulation, the
Corporation shall indemnify and hold harmless the members of the
Committee, and each other officer or employee of the Corporation or
of any of its subsidiaries to whom any duty or power relating to
the administration or interpretation of this Plan may be assigned
or delegated, from and against any and all liabilities (including
any amount paid in settlement of a claim with the approval of the
Committee) and any costs or expenses (including counsel fees)
incurred by such persons arising out of or as a result of, any act
or omission to act in connection with the performance of such
person's duties, responsibilities, and obligations under this Plan,
other than such liabilities, costs, and expenses as may arise out
of, or result from, the bad faith, gross negligence, willful
misconduct, or criminal acts of such persons.
18. Amendment and Modification of this Plan. The Corporate
Board may at any time, and from time to time, amend or modify this
Plan (including the form of Option Agreement) in any respect;
provided, however, that no amendment or modification shall be made
that increases the total number of shares covered by this Plan or
effects any change in the category of persons who may receive
Options under this Plan or materially increases the benefits
accruing to Optionees under this Plan. Any amendment or
modification of this Plan shall not materially reduce the benefits
under any Option therefore granted to an Optionee under this Plan
without the consent of such Optionee or the transferee in the event
of the death of such Optionee.
19. Termination and Expiration of this Plan. This Plan may
be abandoned, suspended, or terminated at any time by the Corporate
Board; provided, however, that abandonment, suspension, or
termination of this Plan shall not affect any Options then
outstanding under this Plan. No Option shall be granted pursuant
to this Plan after ten (10) years from the effective date of this
Plan as provided in paragraph 20 hereof.
20. Effective Date. This Plan has been adopted by the
Corporate Board to be effective as of the date of the Conversion.
21. Captions and Headings; Gender and Number. Captions and
paragraph headings used herein are for convenience only, do not
modify or affect the meaning of any provision herein, are not a
part hereof, and shall not serve as a basis for interpretation or
in construction of this Plan. As used herein, the masculine gender
shall include the feminine and neuter, the singular number, the
plural, and vice versa, whenever such meanings are appropriate.
22. Expenses of Administration of Plan. All costs and
expenses incurred in the operation and administration of this Plan
shall be borne by the Corporation or by one of its subsidiaries.
23. Governing Law. Without regard to the principles of
conflicts of laws, the laws of the State of North Carolina shall
govern and control the validity, interpretation, performance, and
enforcement of this Plan.
24. Inspection of Plan. A copy of this Plan, and any
amendments thereto or modifications thereof, shall be maintained by
the Secretary of the Corporation and shall be shown to any proper
person making inquiry about it.
