UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the period ended March 31, 1994
Commission File Number: 0-12358
CCB FINANCIAL CORPORATION
(Exact name of issuer as specified in charter)
North Carolina 56-1347849
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
111 Corcoran Street, Post Office Box 931, Durham, NC 27702
(Address of principal executive offices)
Registrant's telephone number, including area code (919) 683-7777
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock, $5 Par value 9,516,379
(Class of Stock) (Shares outstanding as
of April 29, 1994)
<PAGE>
CCB FINANCIAL CORPORATION
FORM 10-Q
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 1994, December 31, 1993 and March 31, 1993 3
Consolidated Statements of Income
Three Months Ended March 31, 1994 and 1993 4
Consolidated Statements of Shareholders' Equity
Three Months Ended March 31, 1994 and 1993 5
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1994 and 1993 6
Notes to Consolidated Financial Statements
Three Months Ended March 31, 1994 and 1993 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CCB Financial Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1994 1993 1993
<S> <C> <C> <C>
Assets:
Cash and due from banks $ 163,116,008 191,332,445 200,121,691
Time deposits in other banks 35,154,507 35,431,738 --
Federal funds sold and other short-
term investments 119,321,659 169,286,165 88,600,000
Investment securities (note 2):
Available for sale (market values
of $605,238,338 and $563,187,727) 605,238,338 553,292,393 --
Held for investment (market values
of $66,892,642, $68,553,264 and
$430,194,295) 64,008,926 64,126,134 415,635,793
Loans and lease financing (note 3) 2,161,401,949 2,159,489,054 1,515,127,856
Less reserve for loan and lease
losses (note 4) 26,936,626 26,963,334 18,928,487
Net loans and lease financing 2,134,465,323 2,132,525,720 1,496,199,369
Premises and equipment 42,805,748 42,597,185 35,087,396
Other assets 74,502,663 69,050,959 40,704,902
Total assets $ 3,238,613,172 3,257,642,739 2,276,349,151
Liabilities:
Deposits:
Demand (non-interest bearing) $ 375,521,546 421,432,974 332,207,578
Savings 434,592,625 48,028,190 46,042,433
Money market accounts 794,652,010 1,150,923,169 854,259,488
Time 1,181,251,512 1,196,386,428 757,519,968
Total deposits 2,786,017,693 2,816,770,761 1,990,029,467
Federal funds purchased and
securities sold under
agreements to repurchase 31,338,589 25,526,966 26,363,963
Other short-term borrowed funds 12,984,952 16,202,362 12,926,572
Long-term debt 78,460,490 78,698,073 26,834,479
Other liabilities 72,159,932 69,440,814 26,511,187
Total liabilities 2,980,961,656 3,006,638,976 2,082,665,668
Shareholders' equity:
Serial preferred stock. Authorized
5,000,000 shares; none issued -- -- --
Common stock of $5 par value.
Authorized 20,000,000 shares; 9,516,379,
9,517,277 and 7,816,476 shares issued 47,581,895 47,586,385 39,082,380
Additional paid-in capital 83,332,593 83,349,012 44,950,060
Retained earnings 130,322,812 124,922,331 110,090,484
Unrealized gain (loss) on investment
securities available for sale (note 2) 171,428 (835,677) (439,441)
Less: Unearned common stock held by
Management Recognition Plans (3,757,212) (4,018,288) --
Total shareholders' equity 257,651,516 251,003,763 193,683,483
Total liabilities and
shareholders' equity $ 3,238,613,172 3,257,642,739 2,276,349,151
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Interest income:
Interest and fees on loans $ 43,721,537 32,377,528
Lease financing income 489,621 541,514
Interest and dividends on investment
securities:
U.S. Treasury 4,122,458 4,098,475
U.S. Government agencies and corporations 2,495,434 1,230,949
States and political subdivisions (tax-
exempt) 875,996 832,888
Equity securities 635,944 773,392
Interest on time deposits in other banks 295,759 -
Interest on federal funds sold and
other short-term investments 1,231,893 569,497
Total interest income 53,868,642 40,424,243
Interest expense:
Deposits 19,589,719 14,939,292
Federal funds purchased and securities
sold under agreements to repurchase 148,110 126,583
Other short-term borrowed funds 61,970 124,744
Long-term debt 1,390,665 525,680
Total interest expense 21,190,464 15,716,299
Net interest income 32,678,178 24,707,944
Provision for loan and lease losses (note 4) 1,251,500 1,000,000
Net interest income after provision for
loan and lease losses 31,426,678 23,707,944
Other income:
Service charges on deposit accounts 4,651,459 4,112,087
Trust and custodian fees 1,812,124 1,512,825
Insurance commissions 792,564 474,333
Merchant discount 837,401 669,624
Other service charges and fees 636,573 463,379
Other 1,566,048 697,151
Investment securities gains (losses) 43,851 38,586
Total other income 10,340,020 7,967,985
Other expenses:
Personnel expense 14,714,217 11,979,636
Net occupancy expense 2,242,968 1,750,353
Equipment expense 2,342,314 1,882,351
Other operating expenses 9,810,077 6,620,667
Total other expenses 29,109,576 22,233,007
Income before income taxes and cumulative
changes in accounting principles 12,657,122 9,442,922
Income taxes 4,211,400 3,091,200
Income before cumulative changes in
accounting principles 8,445,722 6,351,722
Cumulative changes in accounting principles
(note 5) - (1,371,234)
Net income $ 8,445,722 4,980,488
Income per share (note 7):
Income before cumulative changes
in accounting principles:
Primary $ .89 .81
Fully diluted .89 .77
Net income:
Primary .89 .64
Fully diluted .89 .61
Weighted average shares outstanding:
Primary 9,516,408 7,809,810
Fully diluted 9,516,408 8,581,110
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Three Months Ended March 31, 1994 and 1993
<TABLE>
<CAPTION>
Unrealized
Gain (Loss)
on
Investment
Additional Securities Management Total
Common Paid-In Retained Available Recognition Shareholders'
Stock Capital Earnings for Sale Plans Equity
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1993 $ 38,895,530 44,095,683 107,454,940 (600,877) - 189,845,276
Net income - - 4,980,488 - - 4,980,488
Conversion of subordinated
debentures 170,245 737,755 - - - 908,000
Stock issued pursuant to
restricted stock plan,
net of forfeitures 16,605 116,622 - - - 133,227
Cash dividends ($.30 per
share) - - (2,344,944) - - (2,344,944)
Revaluation of marketable
equity securities - - - 161,436 - 161,436
Balance March 31, 1993 $ 39,082,380 44,950,060 110,090,484 (439,441) - 193,683,483
Balance December 31, 1993 $ 47,586,385 83,349,012 124,922,331 (835,677) (4,018,288) 251,003,763
Mark to market adjustment,
net of applicable income
taxes (note 2) - - - 6,263,318 - 6,263,318
Balance January 1, 1994 47,586,385 83,349,012 124,922,331 5,427,641 (4,018,288) 257,267,081
Net income - - 8,445,722 - - 8,445,722
Forfeitures of stock issued
pursuant to restricted
stock plan (4,490) (16,419) - - - (20,909)
Earned portion of Management
Recognition Plans - - - - 261,076 261,076
Cash dividends ($.32 per
share) - - (3,045,241) - - (3,045,241)
Change in unrealized gains
(losses), net of applicable
income taxes (note 2) - - - (5,256,213) - (5,256,213)
Balance March 31, 1994 $ 47,581,895 83,332,593 130,322,812 171,428 (3,757,212) 257,651,516
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Operating activities:
Net income $ 8,445,722 4,980,488
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,550,755 1,255,306
Provision for loan and lease losses 1,251,500 1,000,000
Deferred income taxes 1,584,556 (2,237,839)
Net gain on sales of investment securities (43,851) (38,586)
Net amortization and accretion on
investment securities 1,133,368 2,838,414
Amortization of intangibles and other assets 658,830 318,697
Accretion of negative goodwill (853,129) -
Decrease (increase) in accrued interest
receivable (1,367,535) (1,029,937)
Increase (decrease) in accrued interest payable (151,189) 1,585,877
Decrease (increase) in other assets (6,336,966) 1,898,317
Increase (decrease) in other liabilities 3,723,436 6,697,053
Vesting of shares held by Management
Recognition Plans 261,076 -
Issuance of restricted stock, net of forfeitures (20,909) 133,227
Other 3,360 -
Net cash provided by operating activities 9,839,024 17,401,017
Investing activities:
Proceeds from maturities and issuer calls of
investment securities held for investment 1,467,480 110,526,710
Purchases of investment securities held for
investment (1,346,034) (80,463,031)
Proceeds from sales of investment securities
available for sale 42,257,269 -
Proceeds from maturities and issuer calls of
investment securities available for sale 166,783,508 -
Purchases of investment securities available
for sale (260,958,654) -
Net decrease (increase) in loans and leases
receivable (3,296,410) 4,910,013
Purchases of premises and equipment (1,759,318) (1,469,972)
Net cash provided (used) by investing
activities (56,852,159) 33,503,720
Financing activities:
Net increase in deposit accounts (30,753,068) (38,476,769)
Net increase in federal funds purchased and
securities sold under agreements to repurchase 5,811,623 1,095,706
Net decrease in other short-term borrowed
funds (3,217,410) (7,460,003)
Proceeds from issuance of long-term debt 3,500,000 -
Repayments of long-term debt (3,740,943) (3,152)
Cash dividends (3,045,241) (2,344,944)
Net cash used by financing activities (31,445,039) (47,189,162)
Net increase (decrease) in cash and cash
equivalents (78,458,174) 3,715,575
Cash and cash equivalents at January 1 396,050,348 285,006,116
Cash and cash equivalents at March 31 $ 317,592,174 288,721,691
Supplemental disclosure of cash flow information:
Interest paid during the year $ 21,341,653 17,302,176
Income taxes paid during the year $ 41,187 647,283
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CCB Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 1994 and 1993
(1) Consolidation
The consolidated financial statements include the accounts and
results of operations of CCB Financial Corporation (the
Corporation) and its wholly-owned subsidiaries, Central Carolina
Bank and Trust Company (CCB), CCB Savings Bank of Lenoir, Inc.,
SSB, Graham Savings Bank, Inc., SSB and Central Carolina Bank -
Georgia. The consolidated financial statements also include the
accounts and results of operations of CCB Investment and Insurance
Service Corporation, Southland Associates, Inc., CCBDE and 1st
Home Mortgage Acceptance Corporation, wholly-owned subsidiaries of
CCB. All significant intercompany accounts are eliminated in
consolidation.
(2) Investment Securities
Effective January 1, 1994, the Corporation adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS 115). Under SFAS
115, debt securities and equity securities that have readily
determinable fair values are segregated into three categories for
accounting and reporting purposes. Debt and equity securities
that the Corporation has the positive intent and ability to hold
until maturity are classified as held for investment and reported
at amortized cost. Debt and equity securities that are bought and
held principally for the purpose of selling them in the near term
are classified as trading securities and reported at fair value,
with unrealized gains and losses included in earnings. Debt and
equity securities not classified as either held for investment or
as trading securities are classified as available for sale
securities and reported at fair value, with unrealized gains and
losses excluded from earnings and reported in a separate component
of shareholders' equity. Adoption of SFAS 115 resulted in the
recognition of net unrealized securities gains on the available
for sale portfolio which have been reported, net of taxes, as a
separate component of shareholders' equity. Prior to the adoption
of SFAS 115, securities classified as available for sale were
reported at the lower of cost or market value. As SFAS 115 cannot
be retroactively applied to prior years' financial statements,
there are no changes in previously reported unrealized losses on
marketable equity securities.
Investment securities held for investment are stated at amortized
cost. The Corporation has the ability and intent to hold such
securities until maturity. Securities available for sale will be
considered in the Corporation's asset/liability management
strategies and may be sold in response to changes in interest
rates, liquidity needs and/or significant prepayment risk. The
cost of investment securities sold is determined by the
"identified certificate" method.
(3) Loans and Lease Financing
A summary of loans and lease financing at March 31, 1994 and 1993
follows:
1994 1993
Commercial, financial and agricultural $ 382,055,524 321,059,136
Real estate-construction 237,181,184 176,930,151
Real estate-mortgage 1,129,430,178 677,879,782
Instalment loans to individuals 213,099,801 161,483,888
Credit card receivables 177,210,181 157,453,087
Lease financing 25,539,028 23,577,472
Gross loans and lease financing 2,164,515,896 1,518,383,516
Less unearned income 3,113,947 3,255,660
Total loans and lease financing $ 2,161,401,949 1,515,127,856
(4) Reserve for Loan and Lease Losses
Following is a summary of the reserve for loan and lease losses:
1994 1993
Balance at beginning of year $ 26,963,334 19,026,764
Provision charged to operations 1,251,500 1,000,000
Recoveries of loans and leases
previously charged-off 366,598 349,448
Loan and lease losses charged to reserve (1,644,806) (1,447,725)
Balance at March 31 $ 26,936,626 18,928,487
(5) Accounting Changes
The cumulative changes in accounting principles reflect the
adoption of Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions", which resulted in a one-time net charge of $2,271,234
($3,736,834 pre-tax) in recognition of the entire Accumulated
Postretirement Benefit Obligation, and adoption of Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes", which resulted in a one-time benefit of $900,000. Both
Statements were adopted on January 1, 1993.
<PAGE>
(6) Risk Assets
Following is a summary at March 31, 1994 and 1993 (in thousands):
1994 1993
Nonaccrual loans and lease financing $ 11,817 10,700
Other real estate acquired through loan foreclosures 7,382 9,168
Accruing loans and lease financing
90 days or more past due 1,991 3,189
Restructured loans and lease financing - 71
Total risk assets $ 21,190 23,128
(7) Per Share Data
Primary income per share is computed based on the weighted average
number of common shares outstanding during each period. Fully
diluted income per share is computed based on the weighted average
number of common shares outstanding and common shares issuable
upon full conversion of convertible debt (which was fully
converted or redeemed at June 30, 1993). In this computation,
interest expense on convertible debt, net of applicable income
taxes, is added back to income as if the debt was converted into
common stock at the beginning of the period.
(8) Contingencies
Certain legal claims have arisen in the normal course of business,
which, in the opinion of management and counsel, will have no
material adverse effect on the financial position of the
Corporation or its subsidiaries.
(9) Management Opinion
The financial statements in this report are unaudited. In the
opinion of management, all adjustments (none of which were other
than normal accruals) necessary for a fair presentation of the
financial position and results of operations for the periods
presented have been included.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The purpose of this discussion and analysis is to aid in the
understanding and evaluation of financial conditions and changes
therein and results of operations of CCB Financial Corporation
(the "Corporation") and its wholly-owned subsidiaries, Central
Carolina Bank and Trust Company ("CCB"), CCB Savings Bank of
Lenoir, Inc., SSB ("CCB Savings"), Graham Savings Bank, Inc.,
SSB ("Graham Savings") and Central Carolina Bank-Georgia ("CCB-
Ga.") (collectively "the Banks"), and CCB's wholly-owned
subsidiaries, CCB Investment and Insurance Service Corporation,
CCBDE, 1st Home Mortgage Acceptance Corporation and Southland
Associates, Inc. for the three months ended March 31, 1994 and
1993. This discussion and analysis is intended to complement
the unaudited financial statements and footnotes and the
supplemental financial data appearing elsewhere in this Form 10-Q,
and should be read in conjunction therewith.
Results of Operations - Three Months Ended March 31, 1994 and 1993
Income before cumulative changes in accounting principles for
the three months ended March 31, 1994 amounted to $8,446,000, an
increase of $2,094,000 or 33.0% over the same period in 1993.
Net income for the three months ended March 31, 1994 amounted to
$8,446,000, a $3,465,000 increase or 69.6% increase over the
$4,981,000 net income recorded in the first quarter of 1993.
Primary income per share was $.89 in 1994, a $.08 increase over
the 1993 period. On a fully diluted basis, income per share was
also $.89, which represented a $.12 increase over the 1993
period. Returns on average assets and average shareholders'
equity were 1.07% and 13.60%, respectively, compared to .90% and
10.56% in the 1993 period.
Average Balance Sheets and Net Interest Income Analysis on a
taxable equivalent basis for each of the periods are included in
this discussion as Table 1. Average earning assets increased by
$896,428,000 or 43.1% over the 1993 period which was due
primarily to the Corporation's financial institution
acquisitions consummated in the second through fourth quarters
of 1993. The financial institution acquisitions and an overall
decline in interest rates decreased the net interest margin from
5.02% in the first quarter of 1993 to 4.62% in 1994. Despite
the decline in the net interest margin of 40 basis points, net
interest income on a taxable equivalent basis increased
$13,589,000 or 32.8%.
The provision for loan and lease losses was increased to
$1,252,000 from $1,000,000 in 1993 due to the increase in
outstanding loans and lease financing. The reserve for loan and
lease losses to loans and lease financing outstanding was 1.25%
at March 31, 1994 and 1993. Net 1994 loan and lease charge-offs
amounted to $1,278,000 or .24% of average loans and lease
financing compared to .29% in 1993.
Other income increased $2,372,000 in the first quarter of 1994
to $10,340,000 compared to 1993's $7,968,000. The increase was
due in part to a $539,000 increase in service charges on deposit
accounts resulting from increased volume, $318,000 increase in
insurance commissions from increased volume of annuity sales and
$853,000 of negative goodwill accretion from the acquisition of
financial institutions in 1993.
Other expenses in the 1994 period increased by $6,876,000 or
30.9% from the 1993 period. The largest increase was
experienced in personnel expense, a $2,734,000 increase, due to
the 1993 acquisitions of financial institutions. Despite the
increase in personnel expense, a comparison of assets per
employee shows improvement from $1.62 million of assets per
employee at March 31, 1993 to $2.06 million per employee at
March 31, 1994. Other increased expenses included $642,000 of
goodwill amortization, $552,000 of deposit insurance based on
the increased level of deposits and general increases in
expenses resulting from a 42.3% increase in consolidated total
assets from March 1993's level. The effective income tax rate
was 33.27% in 1994 compared to 32.73% in the same period of
1993.
<PAGE>
Table 1
AVERAGE BALANCES AND NET INTEREST INCOME ANALYSIS
Three Months Ended March 31, 1994 and 1993
(Taxable Equivalent Basis - In Thousands) (1)
1994
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning Assets:
Loans and lease financing (2) $ 2,156,573 44,256 8.32 %
U.S. Treasury and agency
obligations 530,360 7,171 5.48
State and political
subdivision obligations 50,400 1,348 10.85
Equity securities 48,330 675 5.66
Federal funds sold and other
short-term investments 156,201 1,286 3.34
Time deposits in other banks 33,404 314 3.81
Total earning assets 2,975,268 55,050 7.50
Non-earning assets:
Cash and due from banks 142,031
Premises and equipment 42,907
All other assets, net 32,909
Total assets $ 3,193,115
Interest bearing
liabilities:
Savings and time deposits $ 2,380,365 19,590 3.34 %
Federal funds purchased and
securities sold under
agreements to repurchase 30,616 148 1.96
Other short-term borrowed funds 11,605 62 2.17
Long-term debt 77,271 1,390 7.30
Total interest bearing
liabilities 2,499,857 21,190 3.44
Other liabilities and
shareholders' equity:
Demand deposits 369,994
Other liabilities 71,486
Shareholders' equity 251,778
Total liabilities and
shareholders' equity $ 3,193,115
Net interest income and net
interest margin (3) $ 33,860 4.62 %
Interest rate spread (4) 4.06 %
1993
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning Assets:
Loans and lease financing (2) $ 1,509,686 33,007 8.87 %
U.S. Treasury and agency
obligations 372,137 5,767 6.28
State and political
subdivision obligations 43,501 1,295 12.07
Equity securities 17,882 306 6.94
Federal funds sold and other
short-term investments 135,634 1,086 3.25
Time deposits in other banks - - -
Total earning assets 2,078,840 41,461 8.09
Non-earning assets:
Cash and due from banks 126,301
Premises and equipment 35,276
All other assets, net 14,017
Total assets $ 2,254,434
Interest bearing
liabilities:
Savings and time deposits $ 1,656,913 14,939 3.66 %
Federal funds purchased and
securities sold under
agreements to repurchase 26,566 126 1.92
Other short-term borrowed funds 19,593 125 2.59
Long-term debt 27,014 526 7.90
Total interest bearing
liabilities 1,730,086 15,716 3.68
Other liabilities and
shareholders' equity:
Demand deposits 310,489
Other liabilities 22,656
Shareholders' equity 191,203
Total liabilities and
shareholders' equity $ 2,254,434
Net interest income and net
interest margin (3) 25,745 5.02 %
Interest rate spread (4) 4.41 %
(1) The taxable equivalent basis is computed using 35% federal and
7.83% state tax rates in 1994 and 34% federal and 7.91% state tax
rates in 1993 where applicable.
(2) The average loan and lease financing balances include non-
accruing loans and lease financing. Loan fees of $1,943,000 and
$1,317,000 for 1994 and 1993, respectively, are included in
interest income.
(3) Net interest margin is computed by dividing net interest
income by total earning assets.
(4) Interest rate spread equals the earning asset yield minus the
interest bearing liability rate.
<PAGE>
Financial Condition
Total assets have decreased slightly, .6%, from year-end 1993
but have increased $962,000,000 since March 31, 1993 due to
acquisitions of financial institutions and internal growth.
Virtually all of the increase is in interest-earning assets.
Average assets have increased from $2,694,973,000 for the year
ended December 31, 1993 to $3,193,115,000 for the three months
ended March 31, 1994 and compare to $2,254,434,000 for the three
months ended March 31, 1993.
At March 31, 1994, risk assets (consisting of nonaccrual loans
and lease financing, foreclosed real estate, restructured loans
and lease financing and accruing loans 90 days or more past due)
amounted to approximately $21,190,000 or .98% of outstanding
loans and lease financing and foreclosed real estate. This
compares to approximately $23,252,000 or 1.07% and $23,128,000
or 1.52% at December 31, 1993 and March 31, 1993, respectively.
The reserve for loan and lease losses to risk assets was 1.27x
at March 31, 1994 compared to 1.16x at December 31, 1993 and
.82x at March 31, 1993.
Effective January 1, 1994, the Corporation adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS 115). Under
SFAS 115, debt securities and equity securities are segregated
into three categories for accounting and reporting purposes.
Debt and equity securities that the Corporation has the positive
intent and ability to hold until maturity are classified as held
for investment and reported at amortized cost. Debt and equity
securities that are bought and held principally for the purpose
of selling them in the near term are classified as trading
securities and reported at fair value, with unrealized gains and
losses included in earnings. Debt and equity securities not
classified as either held for investment or as trading
securities are classified as available for sale securities and
reported at fair value, with unrealized gains and losses
excluded from earnings and reported in a separate component of
shareholders' equity. Adoption of SFAS 115 resulted in the
recognition of net unrealized securities gains on the available
for sale portfolio which have been reported, net of tax, as a
separate component of shareholders' equity. After adjusting
for changes in market value during the quarter, this component
of shareholders' equity totals $171,428 at March 31, 1994.
Investment securities to be held until maturity are classified
as such and will continue to be recorded at amortized cost.
The Corporation's capital position has historically been strong
as evidenced by the Corporation's ratios of average
shareholders' equity to average total assets of 7.89% and 8.48%
for the three months ended March 31, 1994 and 1993,
respectively. Furthermore, the Corporation and the Banks
continue to maintain higher capital ratios than required under
regulatory guidelines. Due to the retention of earnings and the
public offerings of common stock and qualifying debt late in
1993, the Corporation's and Banks' capital ratios are returning
to their pre-acquisition capital ratio levels. The chart below
shows that the Corporation and the Banks significantly exceed
all risk-based capital requirements at March 31, 1994.
March 31, December 31, March 31, Regulatory
Ratio 1994 1993 1993 Minimums
Tier 1 Capital 4.00%
Corporation 10.21% 9.93% 11.24%
CCB 9.33 9.12 11.38
CCB Savings 19.39 17.87 -
Graham Savings 33.90 34.16 -
CCB-Ga. 27.73 30.42 -
Total Capital 8.00
Corporation 13.13 12.86 13.83
CCB 11.40 11.21 12.53
CCB Savings 21.28 19.67 -
Graham Savings 35.59 35.90 -
CCB-Ga. 28.48 31.26 -
Leverage 4.00
Corporation 7.38 8.50 8.48
CCB 6.88 7.47 8.28
CCB Savings 8.95 8.59 -
Graham Savings 16.91 16.64 -
CCB-Ga. 16.66 35.35 -
The Corporation has increased its annual cash dividends
consistently over the past 30 years, increasing to $.32 per
share for the three months ended March 31, 1994 from $.30 per
share for the same period in 1993. Book value increased 9.2% to
$27.07 per share at March 31, 1994 from 1993's level of $24.78.
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the Corporation was
held on April 5, 1994. Proxies for the Annual Meeting
were solicited pursuant to Regulation 14 under the Act.
The proposals voted upon and effected at the Annual
Meeting were (1) increase the number of directors of the
Corporation to 18, (2) elect 18 members of the Board of
Directors (3) approve the Corporation's Long-Term
Incentive Plan, (4) increase the number of authorized
shares of the Corporation's common and preferred stock
from 25,000,000 to 35,000,000 and (5) ratify the
appointment of KPMG Peat Marwick as the Corporation's
independent auditors for 1994. See Exhibit 99 for the
voting results of each of the proposals voted on at the
Annual Meeting.
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
Exhibit 10 - CCB Financial Corporation Long-Term Incentive Plan
Exhibit 99 - Report of Inspectors of Election on Quorum and Voting
Results from the Annual Meeting of Shareholders
held on April 5, 1994
(b). Reports on Form 8-K
A report on Form 8-K dated March 14, 1994 was filed under Items 5 and 7.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CCB FINANCIAL CORPORATION
Registrant
Date: May 13, 1994 /s/ ERNEST C. ROESSLER
Ernest C. Roessler
President and Chief Executive Officer
Date: May 13, 1994 /s/ W. HAROLD PARKER, JR.
W. Harold Parker, Jr.
Senior Vice President and Controller
(Chief Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
10 CCB Financial Corporation Long-Term Incentive Plan
99 Report of Inspectors of Election on Quorum and Voting
Results from the Annual Meeting of Shareholders held
on April 5, 1994
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.
Exhibit 99
ANNUAL MEETING OF THE SHAREHOLDERS OF
CCB FINANCIAL CORPORATION
APRIL 5, 1994
Report of Inspectors of Election
on Quorum and Voting Results
The undersigned have been duly appointed Inspectors of Election
at the Annual Meeting of the Shareholders of CCB Financial
Corporation, held this 5th day of April, 1994, do hereby report
as follows:
Report on Quorum
Pursuant to such appointment, we executed our Oaths of Office and
duly delivered the same to the Secretary of the Corporation.
We inspected the list of shareholders of CCB Financial
Corporation and certify that the number of shares issued,
outstanding and entitled to vote at such meeting was 9,516,379.
We also certify that there were at least 6,102,809 shares of CCB
Financial Corporation stock represented as follows:
Description Number of Shares Percentage
Outstanding and entitled to vote 9,516,379 100.00%
Voting in Person and by Proxy 6,102,809 64.13%
Report on Election
We received and tallied votes cast in person and by proxy "For",
"Against" and "Abstained" regarding the Board of Directors
Proposal No. 1 and we certified the results as follows:
Shares Voting on Proposal No. 1
Description Number of Shares Percentage
Outstanding and entitled to vote 9,516,379 100.00%
Option
"For" 5,975,761 62.79%
"Against" 56,659 .60%
"Abstain" 70,389 .74%
Non Voted Shares 3,413,570 35.87%
Total Shares Accounted For 9,516,379 100.00%
<PAGE>
Inspectors of Election Report
Annual Shareholders' Meeting
4/5/94
Shares Voting on Proposal No. 2
Director "For" Percentage "Withheld" Percentage
Beall 6,052,350 63.59% 50,459 .53%
Brame 6,051,339 63.58% 51,471 .54%
Burnett 6,050,831 63.58% 51,979 .54%
Burns 6,052,509 63.60% 50,301 .52%
Clark 6,054,647 63.62% 48,162 .50%
Dey 6,055,058 63.62% 47,750 .50%
Fox 6,036,984 63.43% 65,825 .69%
Haigler 6,055,156 63.62% 47,654 .50%
Herbert 6,055,080 63.62% 47,730 .50%
Holmes 6,054,414 63.62% 48,396 .50%
Kenan 6,055,373 63.63% 47,436 .49%
McDonald 6,053,285 63.60% 49,524 .52%
McKay 6,052,861 63.60% 49,948 .52%
Munson 6,040,386 63.47% 62,424 .65%
Roessler 6,055,373 63.63% 47,437 .49%
Stedman 6,055,210 63.62% 47,600 .50%
Tate 6,052,710 63.60% 50,100 .52%
Wynn 6,044,540 63.51% 58,270 .61%
Shares Voting on Proposal No. 3
Description Number of Shares Percentage
Outstanding and entitled to vote 9,516,379 100.00%
Option
"For" 4,128,632 43.38%
"Against" 500,284 5.26%
"Abstain" 660,980 6.95%
Non Voted Shares 4,226,483 44.41%
Total Shares Accounted For 9,516,379 100.00%
Shares Voting on Proposal No.4
Description Number of Shares Percentage
Outstanding and entitled to vote 9,516,379 100.00%
Option
"For" 5,826,776 61.23%
"Against" 179,177 1.88%
"Abstain" 96,856 1.02%
Non Voted Shares 3,413,570 35.87%
Total Shares Accounted For 9,516,379 100.00%
<PAGE>
Inspectors of Election Report
Annual Shareholders' Meeting
4/5/94
Shares Voting on Proposal No.5
Description Number of Shares Percentage
Outstanding and entitled to vote 9,516,379 100.00%
Option
"For" 6,067,150 63.75%
"Against" 4,054 .04%
"Abstain" 31,605 .33%
Non Voted Shares 3,413,570 35.88%
Total Shares Accounted For 9,516,379 100.00%
Witness our signature this 5th day of April, 1994.
/s/ James E. Shaw
James E. Shaw
/s/ S. Benton Stone
S. Benton Stone
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