As filed with the Securities and Exchange Commission on February 19, 1997
Registration No. 333-______
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)
_________________________
SALEM TRUST BANK
1986 INCENTIVE STOCK OPTION PLAN
(Full title of the plan)
_________________________
ERNEST C. ROESSLER
CCB Financial Corporation
Post Office Box 931
Durham, North Carolina 27702
(919) 683-7777
(Name and address of agent for service)
Copy to:
ROBERT A. SINGER, Esq.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P.
230 North Elm Street, Suite 2000
Post Office Box 26000
Greensboro, North Carolina 27420
(910) 373-8850
_________________________
CALCULATION OF REGISTRATION FEE (1)
Proposed Proposed Amount of
Title of Amount to Maximum Maximum Registration
Securities be Offering Aggregate Fee(1)
to be Registered Registered Price Offering
Per Share Price
Common Stock, $5 24,488 * $605,415 $209
par value shares
Series A Junior
Participating 24,488 Not Not Not
Preferred Stock rights Applicable Applicable Applicable
Purchase Rights (2)
(1) The shares of Common Stock are being offered to eligible
employees of Registrant and its direct and indirect subsidiaries
pursuant to options granted to them in accordance with the terms
of the Salem Trust Bank 1986 Incentive Stock Option Plan (the
"Plan") adopted by Registrant in connection with its acquisition
of Salem Trust Bank. 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.
(2) The Series A Junior Participating Preferred Stock purchase
rights will be attached to and trade with the shares of
Registrant's Common Stock.
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, 1995;
(ii) Registrant's Current Report on Form 8-K
dated April 16, 1996, May 14, 1996, October 4, 1996 and November
26, 1996;
(iii) Registrant's Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1996, June 30, 1996 and
September 30, 1996; and
(iv) The description of the Registrant's stock contained
in its Current Report on Form 8-K dated July 1, 1983, as amended by
Form 8-K/A2 dated June 14, 1996 and its Form 8-A dated July 29,
1996.
In addition, all documents subsequently filed with the
Commission by Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that all
securities being offered have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated
herein by reference and to be a part hereof from the dates of
filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Registrant is incorporated under the laws of the State of North
Carolina. North Carolina's Business Corporation Act (the "BCA")
contains provisions prescribing the extent to which directors and
officers of a corporation shall or may be indemnified.
The BCA permits a corporation, with certain exceptions, to
indemnify a current or former officer or director against liability
if he acted in good faith and he reasonably believed (i) in the
case of conduct in his official capacity with the corporation, that
his conduct was in its best interests, (ii) in all other cases,
that his conduct was at least not opposed to its best interests and
(iii) with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. A
corporation may not indemnify him in connection with a proceeding
by or in the right of the corporation in which he was adjudged
liable to the corporation or in connection with any other
proceeding charging improper personal benefit to him, whether or
not involving action in his official capacity, in which he was
adjudged liable on the basis that personal benefit was improperly
received by him unless and only to the extent that the court in
which such action or suit was brought shall determine upon
application that, despite the adjudication of liability, but in
view of all the circumstances of the case, he is fairly and
reasonably entitled to indemnity for such reasonable expenses
incurred which the court shall deem proper.
The BCA requires a corporation to indemnify an officer or director
in the defense of any proceeding to which he was a party against
reasonable expenses to the extent that he is wholly successful on
the merits or otherwise in his defense. Indemnification under the
BCA generally shall be made by the corporation only upon a
determination that indemnification of the director or officer was
proper under the circumstances because he met the applicable
standard of conduct. Such determination may be made by (i) the
Board of Directors by a majority vote of a quorum consisting of
directors who are not parties to such proceeding, (ii) if such a
quorum is not obtainable, by majority vote of a committee duly
designated by the Board of Directors consisting solely of two or
more directors not at the time party to such proceeding, (iii) if
such quorum is not obtainable, or, even if obtainable if a quorum
of disinterested directors so directs, by independent legal counsel
in a written opinion, or (iv) by the stockholders of the
corporation.
The BCA permits a corporation to provide for indemnification of
directors and officers in its Articles of Incorporation or Bylaws
or by contract or otherwise, against liability in various
proceedings, and to purchase and maintain insurance policies on
behalf of these individuals. The Articles of Incorporation of the
Registrant provide for the elimination of the personal liability
for monetary damages for certain breaches of fiduciary duty and the
Bylaws of the Registrant provide for the indemnification of
directors and officers to the maximum extent permitted by North
Carolina 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 Brooks, Pierce, McLendon, Humphrey &
Leonard, L.L.P. as to the legality of the securities
being registered (filed herewith).
23.1 Consent of KPMG Peat Marwick LLP (filed
herewith).
23.2 Consent of Brooks, Pierce, McLendon, Humphrey &
Leonard, L.L.P. (contained in its opinion filed herewith
as Exhibit 5).
24 Power of Attorney (filed herewith).
99 Copy of Amended and Restated Salem Trust Bank
1986 Incentive Stock Option Plan (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.
(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.
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 February 18, 1997.
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 on Form S-8 has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ ERNEST C. ROESSLER Vice Chairman, President February 18, 1997
Ernest C. Roessler and Director
(Principal Executive
Officer)
/s/ W. HAROLD PARKER, JR. Senior Vice President and February 18, 1997
W. Harold Parker, Jr. Controller
(Principal Financial and
Accounting Officer)
*/s/ W. L. BURNS, JR. Chairman of the Board of February 18, 1997
W. L. Burns, Jr. Directors
__________________ Director February __, 1997
John M. Barnhardt
*/s/ J. HARPER BEALL, III Director February 18, 1997
J. Harper Beall, III
*/s/ JAMES B. BRAME, JR. Director February 18, 1997
James B. Brame, Jr.
*/s/ TIMOTHY B. BURNETT Director February 18, 1997
Timothy B. Burnett
*/s/ EDWARD S. HOLMES Director February 18, 1997
Edward S. Holmes
*/s/ BONNIE MCELVEEN- Director February 18, 1997
HUNTER
Bonnie McElveen-Hunter
*/s/ DAVID B. JORDAN Vice Chairman and February 18, 1997
David B. Jordan Director
*/s/ OWEN G. KENAN Director February 18, 1997
Owen G. Kenan
*/s/ EUGENE J. MCDONALD Director February 18, 1997
Eugene J. McDonald
*/s/ HAMILTON W. MCKAY, JR. Director February 18, 1997
Hamilton W. McKay, Jr., M.D.
__________________ Director February __, 1997
George J. Morrow
*/s/ ERIC B. MUNSON Director February 18, 1997
Eric B. Munson
__________________ Director February __, 1997
Miles J. Smith, Jr.
*/s/ JIMMY K. STEGALL Director February 18, 1997
Jimmy K. Stegall
*/s/ H. ALLEN TATE, JR. Director February 18, 1997
H. Allen Tate, Jr.
__________________ Director February __, 1997
James L. Williamson
*/s/ PHAIL WYNN, JR. Director February 18, 1997
Dr. Phail Wynn, Jr.
* BY: /s/ W. HAROLD PARKER, JR.,
W. Harold Parker, Jr., Attorney-in-fact
EXHIBIT INDEX
Exhibit
Number Description
4 Specimen of Registrant's Common Stock. Incorporated by
reference
5 Opinion of Brooks, Pierce, McLendon,
Humphrey & Leonard, L.L.P. as to the
legality of the securities to
being registered.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Brooks, Pierce, McLendon,
Humphrey & Leonard, L.L.P. Included in
Exhibit 5
24 Power of Attorney.
99 Copy of Amended and Restated Salem Trust Bank
1986 Incentive Stock Option Plan.
CCB Financial Corporation
111 Corcoran Street
Durham, North Carolina 27701
Re: Registration Statement on Form S-8
24,488 Shares of Common Stock
Gentlemen and Ladies:
In connection with the possible offering and sale from
time to time of all or a portion of 24,488 shares of the
Common Stock, $5.00 par value per share (the "Shares"), of CCB
Financial Corporation (the "Corporation"), upon the terms and
conditions set forth in the Registration Statement on Form S-8
(the "Registration Statement") filed February 19, 1997 by the
Corporation with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, we are of the opinion
that:
1. The Corporation is a corporation duly organized and
validly existing under the laws of the State of North
Carolina; and
2. When (a) the Registration Statement shall become
effective and (b) the Shares have been sold upon the
terms and conditions set forth in the Registration
Statement, the Shares will be validly authorized and
legally issued, fully paid and non-assessable.
We hereby consent (1) to be named in the Registration
Statement and in the Prospectus which constitutes a part
thereof as attorneys who will pass upon legal matters in
connection with the Shares and (2) to the filing of a copy of
this opinion as Exhibit 5 to the Registration Statement.
Very truly yours,
/s/ ROBERT A. SINGER
Robert A. Singer
The Board of Directors
CCB Financial Corporation
We consent to the use of our report dated January 23, 1996
included in CCB Financial Corporation's Form 10-K for the year
ended December 31, 1995 incorporated herein by reference in
the Registration Statement to register 24,488 shares of common
stock to be issued pursuant to the Amended and Restated Salem
Trust Bank 1986 Incentive Stock Option Plan.
Our report refers to the fact that on January 1, 1994, CCB
Financial Corporation adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," and on
January 1, 1993, CCB Financial Corporation adopted the
provisions of SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," and SFAS No.
109, "Accounting for Income Taxes."
KPMG PEAT MARWICK LLP
Raleigh, North Carolina
February 19, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of CCB Financial
Corporation, and the several undersigned officers and directors
thereof whose signatures appear below hereby makes, constitutes and
appoints Ernest C. Roessler and W. Harold Parker, Jr. or either of
them, its and his or her true and lawful attorneys, with full power
of substitution to execute, deliver and file in its, his or her name
and on its, 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, and the related Series A Junior
Participating Preferred Stock Purchase Rights to be issued pursuant
to the Salem Trust Bank 1986 Incentive Stock Option Plan 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 Statement"), (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; 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 in each of said 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, his or her signatures as the same may be signed by
said attorneys to any of all of such Registration Statement 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 and all documents
in support thereof or amendatory 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
By: /s/ ERNEST C. ROESSLER
Ernest C. Roessler
Vice Chairman, President and
Chief Executive Officer
Dated: February 18, 1997
Signature Title Date
/s/ ERNEST C. ROESSLER Vice Chairman, President February 18, 1997
Ernest C. Roessler and Director
(Principal Executive
Officer)
/s/ W. HAROLD PARKER, JR. Senior Vice President and February 18, 1997
W. Harold Parker, Jr. Controller
(Principal Financial and
Accounting Officer)
/s/ W. L. BURNS, JR. Chairman of the Board of February 18, 1997
W. L. Burns, Jr. Directors
__________________ Director February __, 1997
John M. Barnhardt
/s/ J. HARPER BEALL, III Director February 18, 1997
J. Harper Beall, III
/s/ JAMES B. BRAME, JR. Director February 18, 1997
James B. Brame, Jr.
/s/ TIMOTHY B. BURNETT Director February 18, 1997
Timothy B. Burnett
/s/ EDWARD S. HOLMES Director February 18, 1997
Edward S. Holmes
/s/ BONNIE MCELVEEN-HUNTER Director February 18, 1997
Bonnie McElveen-Hunter
/s/ DAVID B. JORDAN Vice Chairman and February 18, 1997
David B. Jordan Director
/s/ OWEN G. KENAN Director February 18, 1997
Owen G. Kenan
/s/ EUGENE J. MCDONALD Director February 18, 1997
Eugene J. McDonald
/s/ HAMILTON W. MCKAY, JR. Director February 18, 1997
Hamilton W. McKay, Jr., M.D.
__________________ Director February __, 1997
George J. Morrow
/s/ ERIC B. MUNSON Director February 18, 1997
Eric B. Munson
__________________ Director February __, 1997
Miles J. Smith, Jr.
/s/ JIMMY K. STEGALL Director February 18, 1997
Jimmy K. Stegall
/s/ H. ALLEN TATE, JR. Director February 18, 1997
H. Allen Tate, Jr.
__________________ Director February __, 1997
James L. Williamson
/s/ PHAIL WYNN, JR. Director February 18, 1997
Dr. Phail Wynn, Jr.
AMENDED AND RESTATED
SALEM TRUST BANK
1986 INCENTIVE STOCK OPTION PLAN
Effective January 9, 1986
SALEM TRUST BANK
1986 INCENTIVE STOCK OPTION PLAN
TABLE OF CONTENTS
Page
Section 1. Purpose 1
Section 2. Administration 1
Section 3. Stock Available for Options 2
Section 4. Nonqualified Options 3
Section 5 Eligibility 3
Section 6. Option Price 4
Section 7. Expiration of Options 5
Section 8. Terms and Conditions of Options 6
Section 9. Exercise of Options 7
Section 10. Termination of Employment -
Except by Death or Retirement 8
Section 11. Termination of Employment -
Retirement 8
Section 12. Termination of Employment -
Death 8
Section 13. Restrictions on Transfer 9
Section 14. Right of Repurchase by the Company 9
Section 15. Capital Adjustments Affecting
Common Stock 9
Section 16. Application of Funds 11
Section 17. No Obligation to Exercise Option 11
Section 18. Term of Plan 11
Section 19. Effective Date of Plan 12
Section 20. Time of Granting of Options 12
Section 21. Termination and Amendment 12
Section 22. Other Provisions 12
AMENDED AND RESTATED
SALEM TRUST BANK
1986 INCENTIVE STOCK OPTION PLAN
THIS IS THE 1986 INCENTIVE STOCK OPTION PLAN ("Plan") of SALEM
TRUST BANK ("the Bank"), a banking organization organized under
the laws of the State of North Carolina, with its principal
office in Forsyth County, North Carolina, effective January
9, 1985, under which options may be granted from time to time to
eligible employees of the Bank to purchase shares of common stock
of the Bank, subject to the provisions set forth as follows:
1. PURPOSE
The purpose of this Plan is to aid the Bank in attracting
capable executives and to provide a long range inducement for key
employees to remain in the management of the Bank, to perform at
increasing levels of effectiveness and to acquire a permanent
stake in the Bank with the interest and outlook of an owner.
These objectives will be promoted through the granting to key
employees of options to acquire shares of common stock of the
Bank pursuant to the terms of this Plan.
2. ADMINISTRATION
The Plan shall be administered by a committee to be
appointed from time to time by the Board of Directors of the Bank
(the "Committee"). If action is to be taken by the Committee
concerning the granting of options to any member of the Committee
or in any way affecting the options held by a Committee member,
then that interested Committee member shall abstain from voting
on these issues.
The Committee shall have full authority to award options, to
interpret the Plan, and to make such determinations as it deems
appropriate for the administration of the Plan, taking into
consideration the recommendations of management. The
determinations or the interpretation and construction of any
provision of the Plan by the Committee shall be final and
conclusive upon all persons affected thereby.
It shall be in the discretion of the Committee to grant
options which qualify as "incentive stock options" (as that term
is defined in Section 422A of the Internal Revenue Code of 1954,
as amended) or which will be given tax treatment as "nonqualified
stock options" (herein referred to collectively as "options";
however, whenever reference is specifically made only to
"incentive stock options" or "nonqualified stock options," such
reference shall be deemed to be made to the exclusion of the
other).
Any action of the Committee with respect to the Plan shall
be taken by a majority vote at a meeting of the Committee or by
written consent of all of the members of the Committee without a
meeting.
3. STOCK AVAILABLE FOR OPTIONS
(a) The stock to be subject to options under the Plan shall
be authorized but unissued shares of common stock of the Bank or,
in the discretion of the Committee, issued shares which have been
reacquired by the Bank. The total amount of stock for which
options may be granted under the Plan shall not exceed 159,523
shares. Such number of shares is subject to any capital
adjustments as provided in Section 14. In the event that an
option granted under the Plan expires or is terminated
unexercised as to any shares covered thereby, such
shares thereafter shall be available for the granting of options
under the Plan; however, if the expiration or termination date of
any option is beyond the term of existence of the Plan as
described in Section 16, then any shares covered by unexercised -
or terminated options shall not reactivate the existence of this
Plan and therefore may not be available for additional grants
under the Plan.
(b) No more then ten percent (10%) of the Bank's
outstanding shares may be committed to the Plan.
4. NONQUALIFIED OPTIONS
All eligible employees, nonemployee directors and advisory
directors of the Bank may receive nonqualified stock options.
Eligibility to receive nonqualified options shall be established
pursuant to Section 5 below. All characteristics of the
nonqualified options, including option prices, shall be
established as provided in the Plan.
5. ELIGIBILITY
Options shall be granted only to individuals who meet the
following eligibility requirements:
(a) Except for grants of nonqualified stock options to
directors and advisory directors, such individual must be an
employee of the Bank. An individual shall be considered to
be an "employee" only if there exists between the Bank and
the individual the legal and bona fide relationship of
employer and employee. In determining whether such
relationship exists, the regulations of the United states
Treasury Department relating to the determination of such
relationship for the purpose of collection of income tax at
the source on wages shall be applied;
(b) Except for grants of nonqualified stock options to
directors and advisory directors, such employees must be
"key employees" of the Bank. For this purpose, "key
employees" shall be considered to be those employees who, in
the judgment of the Committee, are in a position materially
to affect the operations and profitability of the Bank by
reason of the nature and extent of their duties and
responsibilities.
(c) Such individual must have such knowledge and experience
in financial and business matters that he is capable of
evaluating the merits and risks of the investment involved
in the exercise of the options;
(d) Such individual, being otherwise eligible under this
Section 4, shall have been selected by the Committee as a
person to whom an option shall be granted under the Plan;
(e) Nonqualified options may be granted to (i) key
employees as further defined in (a)and (b) above, (ii)
directors of the Bank, and (iii) advisory directors of the
Bank. Individuals who are not key employees of the Bank,
will not be eligible to receive incentive stock options; and
(f) In determining the individuals to whom options shall be
granted and the number of shares to be covered by each
option, the Committee shall take into account the nature of
the services rendered by the respective individuals, their
present and potential contributions to the success of the
Bank and such other factors as the Committee shall deem
relevant. An individual who has been granted an option
under the Plan may be granted an additional option or
options under the Plan if the Committee shall so determine.
(g) No more than forty percent (40%) of the shares set
aside for option pursuant to the Plan may be allocated to
any one participant in the Plan.
6. OPTION PRICE
(a) Except in the case where options are granted to an
individual who owns stock possessing more than 10 percent
(10%) of the total combined voting power of all classes of
stock of the Bank or its subsidiary corporations ("ten
percent shareholder"), the option price of each option
granted under the Plan shall be not less than one hundred
percent (100%) of the market value of the stock on the date
of grant of the incentive stock option. In the case of
incentive stock options granted to a ten percent
shareholder, the option price of each incentive stock
option granted under the Plan shall not be less than one
hundred ten percent (110%) of the market value of the stock
on the date of grant of the incentive stock option. "Market
value" shall be determined by the Committee in its dis
cretion as of the time of the granting of each option upon
the consideration by the Committee of such factors that it
shall deem pertinent. By way of illustration and not of
limitation, such factors may be (i) recent sales prices of
the Bank's stock; (ii) recent results of the Bank's
business operations; (iii) current book value and net
worth; (iv) various financial ratios which the Committee may
deem appropriate; (v) projections of the bank's future
business operations and opportunities; and (vi) such other
factors which may be relevant under applicable Federal tax
laws and Internal Revenue Service rules and regulations.
The option price is subject to any capital adjustment as
provided in Section 14.
(b) The option price for nonqualified stock options shall
be established by the Committee in its discretion and shall
not be less than the market value of the stock on date of
grant.
(c) The option price shall be payable to the Bank either
(i) in cash or by check, bank draft or money order payable
to the order of the Bank, or (ii) at the discretion of the
Committee, through the delivery of shares of the common
stock of the Bank owned by the optionee with a value equal
to the option price, or (iii) at the discretion of the
Committee by a combination of (i) and (ii) above. No shares
shall be delivered until full payment has been made. The -
Committee may not approve a reduction of such purchase price
in any such option, or the cancellation of any such option
and the regranting thereof to the same optionee at a lower
purchase price, at a time when the market value of the
shares is lower than it was when such option was granted.
7. EXPIRATION OF OPTIONS
The Committee shall determine the expiration date or dates
of each option, but such expiration date shall be not later than
ten (10) years after the date an incentive stock option is
granted or later than eleven (11) years after the date a
nonqualified stock option is granted. The Board, in its
discretion, may extend the expiration date or dates of an option
after such date was originally set; however, such expiration date
may not exceed the maximum expiration date described above.
8. TERMS AND CONDITIONS OF OPTIONS
(a) All options must be granted within ten (10) years of
the Effective Date of this Plan as provided in Section 18;
(b) The Committee may grant incentive stock options and
nonqualified stock options, either separately or jointly, to
an eligible employee;
(c) The grant of options shall be evidenced by a written
instrument containing terms and conditions established by
the Committee consistent with the provisions of this Plan;
(d) The Committee may grant an option or options to an
optionee and stipulate that a portion of such option expires
or becomes exercisable at a stated interval or that portions
of such option expires or becomes exercisable at several
stated intervals;
(e) An optionee shall have no rights as a stockholder with
respect to any shares covered by his option until payment in
full by him for the shares being purchased. No adjustment
shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or
distributions or other rights for which the record date is
prior to the date such stock is fully paid for, except as
provided in Section 13 hereof; and
(f) The aggregate fair market value (determined as of the
time the option is granted) of the stock for which an
optionee may be granted incentive stock options in any cal
endar year (including incentive stock options granted under
all option plans of the Bank or any of its subsidiary
corporations) shall not exceed $100,000 plus any unused
limit carryover (as that term is defined in Section 422A of
the Internal Revenue Code of 1954, as amended) to such
year; provided, however, that such $100,000 limit of this
subsection (f) shall not apply to the grant of nonqualified
stock options.
9. EXERCISE OF OPTIONS
(a) As to options granted to an employee, such optionee
must have been continuously employed or remain in the employ
of the Bank for such period of time prior to or from the
date of grant before the right to exercise any part of the
option granted to such employee will accrue as shall be
determined by the Committee. Each option granted under the
Plan shall be exercisable at such time or in such annual
installments as may be determined by the Committee at the
time of the grant. The right to exercise options in annual
installments may be cumulative. Except as provided in
Sections 10 and 11, no option may be exercised at any time
unless the holder thereof is then an employee of the Bank.
The exercise of any stock option must be evidenced by
written notice to the Bank that the optionee intends to
exercise his stock option. In no event shall an option
granted pursuant to the terms of the Plan be exercised until
the Plan has been approved by the shareholders of the Bank
and by the Commissioner of Banks of the State of North
Carolina.
(b) No option may be exercised and no shares may be
acquired under the Plan prior to the timely filing by both
the optionee and the Bank of all appropriate documents that
may be required by applicable federal and state securities
laws and state corporate laws.
(c) No incentive stock options granted pursuant to the Plan
may be exercised by an individual unless all incentive stock
options granted to such individual pursuant to the Plan
prior to the date of grant of the incentive stock options in
question have been exercised in full or have expired by
reason of lapse of time.
10. TERMINATION OF EMPLOYMENT - EXCEPT BY DEATH OR RETIREMENT
If any optionee ceases to be employed by the Bank or ceases
to be a director or advisory director of the Bank for any reason
other than his death, disability retirement or normal retirement
(age 65), his option shall immediately terminate. Whether a leave
of absence shall constitute a termination of employment shall be
determined by the Committee, whose decision shall be final and
conclusive.
11. TERMINATION OF EMPLOYMENT - RETIREMENT
If any optionee ceases to be employed by the Bank due to his
retirement upon attaining normal retirement age (age 65), he may,
at any time within three (3) months after his date of retirement,
but not later than the date of expiration of the option,
exercise the option to the extent the employee was entitled to do
so on his date of retirement. If any optionee ceases to be
employed by the Bank due to his becoming disabled, he may, at any
time within twelve (12) months after his date of retirement, but
not later than the date of expiration of the option, exercise the
option to the same extent the employee was entitled to do so on
his date of retirement. Any options or portions of options of
retired optionees not so exercised shall terminate.
12. TERMINATION OF EMPLOYMENT - DEATH
If any optionee dies while in the employment of the Bank,
the person or persons to whom the option is transferred by will
or by the laws of descent and distribution may exercise the same
option to the same extent and upon the same terms and conditions
the optionee would have been entitled to do so had he lived until
the term of the option had expired. Any options or portions of
options of deceased optionees not so exercised shall terminate.
13. RESTRICTIONS ON TRANSFER
An option granted under this Plan may not be transferred
except by will or the laws of descent and distribution and,
during the lifetime of the optionee to whom it was granted, may
be exercised only by such optionee.
14. RIGHT OF REPURCHASE BY THE BANK
As to any option granted to an employee of the Bank, if an
optionee exercises any option pursuant to the Plan and ceases to
be employed by the Bank for any reason (other than death or
retirement) during a period of one year subsequent to the
exercise of the option, then the Bank, or its appointee, shall
have the right for a period of 45 days after the date the
optionee ceases to be employed by the Bank to repurchase from the
optionee the same number of shares acquired by the optionee
through the exercise of the option at the same price the optionee
paid for such shares.
The above restriction as set forth in the Section 14 shall
be included in each option granted under this Plan, and in the
discretion of the Committee, the following legend may be placed
on the stock certificate representing shares transferred to
optionees pursuant to the exercise of options under the Plan:
These securities are subject to the Bank's right of
repurchase contained in the Salem em Trust Bank 1986
Incentive Stock Option Plan, effective January 9,
1986, at the option price stated in the optionee's
Stock Option Grant and Agreement.
15. CAPITAL ADJUSTMENTS AFFECTING COMMON STOCK
(a) If the outstanding shares of the common stock of the
Bank are increased, decreased, changed into or exchanged for
a different number or kind of shares or securities of the
Bank or shares of a different par value or without par value
through reorganization, recapitalization, reclassification,
stock dividend, stock split, amendment to the Bank's
Articles of Incorporation or reverse stock split, an
appropriate adjustment shall be made in the number and/or
kind of securities allocated to the options previously and
subsequently granted under the Plan, without change in the
aggregate purchase price applicable to the unexercised
portion of the outstanding options but with a corresponding
adjustment in the price for each share or other unit of any
security covered by the options.
(b) Upon the effective date of the dissolution or
liquidation of the Bank, or of a reorganization, merger or
consolidation of the Bank with one or more corporations in
which the Bank is not the surviving corporation ration, or
of a transfer of substantially all the property or more than
eighty percent (80%) of the then outstanding shares of the
Bank to another corporation, the Plan and any option
previously granted hereunder shall terminate unless
provision is made in writing in connection with such
transaction for the continuance of the Plan and for the
assumption of options theretofore granted, or the
substitution for such options of new options covering the
shares of a successor employer corporation, or of a parent
or subsidiary thereof, with appropriate adjustments as to
number and kind of shares and prices in which event the Plan
and the options theretofore granted or the new options
substituted therefor, shall continue in the manner and under
the terms so provided. In the event of such dissolution,
liquidation, reorganization, merger, consolidation, transfer
of assets or transfer of shares, and if provision is not
made in such transaction for the continuance of the Plan and
for the assumption of options theretofore granted or for the
substitution of such options or new options covering the
shares of a successor employer corporation or a parent or
subsidiary thereof, then such optionee under the Plan shall
be entitled, prior to the effective date of any such
transaction, to purchase the full number of shares under his
option which he would otherwise have been entitled to
purchase during the remaining term of such option.
(c) To the extent that the foregoing adjustments relate to
particular stock or securities of the Bank subject to option
under this Plan, such adjustments shall be made by the
Committee, whose determination in that respect shall be
final and conclusive.
(d) The grant of an option pursuant to this Plan shall not
affect in any way the right or power of the Bank to make
adjustments, reclassifications, reorganizations or changes
of its capital or business structure or to merge or to
consolidate or to dissolve, liquidate or sell, or transfer
all or any part of its business or assets.
(e) No fractional shares of stock shall be issued under the
Plan for any such adjustment.
16. APPLICATION OF FUNDS
The proceeds received by the Bank from the sale of common
stock pursuant to options will be used for general corporate
purposes.
17. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon
the optionee to exercise such option.
18. TERM OF PLAN
Options may be granted pursuant to this Plan from time to
time within a period of ten (10) years from the date this Plan is
approved by the Board of Directors.
19. EFFECTIVE DATE OF PLAN
This Plan shall become effective January 9, 1986, following
approval thereof by the Board of Directors. Pursuant to federal
tax law and North Carolina banking law, the Board shall submit
the Plan to the shareholders of the Bank and the Commissioner of
Banks for their respective approvals. No options granted prior
to receipt of such approvals shall be exercisable until both such
approvals shall have been obtained.
20. TIME OF GRANTING OF OPTIONS
Nothing contained in the Plan or in any resolution adopted
or to be adopted by the Board or the shareholders of the Bank and
no action taken by the Board shall constitute the granting of any
options hereunder. The granting of an option pursuant to the
Plan shall take place only when a written option agreement shall
have been duly executed and delivered by and on behalf of the
Bank.
21. TERMINATION AND AMENDMENT
The Board may at any time alter, suspend, terminate or
discontinue the Plan, but may not, without the consent of the -
holder of an option previously granted, make any alteration which
would deprive him of his rights with respect thereto or, without
the approval of the stockholders, make any alteration which would
(a) increase the number of aggregate shares subject to the option
under this Plan or decrease the minimum option price except as
provided in Section 14; or (b) extend the term of this Plan as
provided in Section 18 or the maximum period during which an
option may be exercised as provided in Section 7.
22. OTHER PROVISIONS
The option agreements authorized under this Plan shall
contain such other provisions not inconsistent with the forego
ing, including, without limitation, increased restrictions upon
the exercise of the option, as the Board may deem advisable.
