As filed with the Securities and Exchange Commission on November 24, 1999
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)
_________________________
STONE STREET BANCORP, INC.
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
(336) 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 82,059 $45.32 $3,718,913.88 $981.79
par value shares
Series A Junior
Participating 82,059 Not Not Not
Preferred Stock rights Applicable Applicable Applicable
Purchase Rights
(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 Stone Street Bancorp, Inc. Stock Option Plan (the "Plan")
adopted by Registrant in connection with its acquisition of Stone
Street Bancorp, Inc. 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, 1998;
(ii) Registrant's Current Reports on Form 8-K dated April
14, 1999, April 27, 1999 and June 28, 1999;
(iii) Registrant's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1999, June 30, 1999 and September 30,
1999; 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 Form 8-K/A3 dated October 1,
1998 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 4.1 of
Registrant's Current Report on Form 8-K dated October 1,
1998).
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 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 Stone Street Bancorp, Inc. 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 November 23, 1999.
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 Capacity Date
/s/ ERNEST C. ROESSLER* Chairman of the Board November 23, 1999
Ernest C. Roessler of Directors and
President
(principal executive
officer)
/s/ SHELDON M. FOX* Executive Vice November 23, 1999
Sheldon M. Fox President and Chief
Financial Officer
(principal financial
officer)
/s/ W. HAROLD PARKER, JR.* Senior Vice President November 23, 1999
W. Harold Parker, Jr. and Controller
(principal
accounting officer)
/s/ WILLIAM L. ABERCROMBIE, JR.* Vice Chairman and November 23, 1999
William L. Abercrombie, Jr. Director
____________________ Director November ___, 1999
J. Harper Beall, III
/s/ JAMES B. BRAME, JR.* Director November 23, 1999
James B. Brame, Jr.
/s/ TIMOTHY B. BURNETT* Director November 23, 1999
Timothy B. Burnett
____________________ Director November ___, 1999
Blake P. Garrett, Jr.
/s/ EDWARD S. HOLMES* Director November 23, 1999
Edward S. Holmes
/s/ DAVID B. JORDAN* Vice Chairman and November 23, 1999
David B. Jordan Director
____________________ Director November ___, 1999
C. Dan Joyner
____________________ Director November ___, 1999
Owen G. Kenan
/s/ EUGENE J. McDONALD* Executive Vice November 23, 1999
Eugene J. McDonald Chairman and Director
____________________ Director November ___, 1999
Bonnie McElveen-Hunter
/s/ HAMILTON W. McKAY, JR.* Director November 23, 1999
Hamilton W. McKay, Jr., M.D.
____________________ Director November ___, 1999
George J. Morrow
/s/ ERIC B. MUNSON* Director November 23, 1999
Eric B. Munson
____________________ Director November ___, 1999
David E. Shi
/s/ JIMMY K. STEGALL* Director November 23, 1999
Jimmy K. Stegall
/s/ H. ALLEN TATE, JR.* Director November 23, 1999
H. Allen Tate, Jr.
____________________ Director November ___, 1999
James L. Williamson
/s/ PHAIL WYNN, JR.* Director November 23, 1999
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 be registered
23.1 Consent of KPMG LLP
23.2 Consent of Brooks, Pierce, McLendon,
Humphrey & Leonard, L.L.P. Included in Exhibit 5
24 Power of Attorney
99 Copy of Stone Street Bancorp, Inc. Stock Option Plan
November 22, 1999
(336) 271-3123
CCB Financial Corporation
111 Corcoran Street
Durham, North Carolina 27701
Re: Registration Statement on Form S-8
82,059 Shares of Common Stock
Ladies and Gentlemen:
In connection with the possible offering and sale from time
to time of all or a portion of 82,059 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 on or about November 19, 1999 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.
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
duly 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 a copy of this letter as Exhibit
5 to the Registration Statement.
Very truly yours,
/s/ ROBERT A. SINGER
Robert A. Singer
RAS/clv
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
CCB Financial Corporation
We consent to the use of our report dated January 19, 1999
included in CCB Financial Corporation's Form 10-K for the year
ended December 31, 1998 incorporated herein by reference.
KPMG LLP
Raleigh, North Carolina
November 23, 1999
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, Sheldon M. Fox and W. Harold
Parker, Jr. or any 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 Stone Street
Bancorp, Inc. 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
Chairman, President and
Chief Executive Officer
Dated: November 23, 1999
Signature Capacity Date
/s/ ERNEST C. ROESSLER Chairman of the Board November 23, 1999
Ernest C. Roessler of Directors and
President
(principal executive
officer)
/s/ SHELDON M. FOX Executive Vice November 23, 1999
Sheldon M. Fox President and
Chief Financial
Officer
(principal financial
officer)
/s/ W. HAROLD PARKER, JR. Senior Vice President November 23, 1999
W. Harold Parker, Jr. and Controller
(principal
accounting officer)
/s/ WILLIAM L. ABERCROMBIE, JR. Vice Chairman and November 23, 1999
William L. Abercrombie, Jr. Director
____________________ Director November __, 1999
J. Harper Beall, III
/s/ JAMES B. BRAME, JR. Director November 23, 1999
James B. Brame, Jr.
/s/ TIMOTHY B. BURNETT Director November 23, 1999
Timothy B. Burnett
____________________ Director November ___, 1999
Blake P. Garrett, Jr.
/s/ EDWARD S. HOLMES Director November 23, 1999
Edward S. Holmes
/s/ DAVID B. JORDAN Vice Chairman and November 23, 1999
David B. Jordan Director
____________________ Director November __, 1999
C. Dan Joyner
____________________ Director November __, 1999
Owen G. Kenan
/s/ EUGENE J. McDONALD Executive Vice November 23, 1999
Eugene J. McDonald Chairman and Director
____________________ Director November __, 1999
Bonnie McElveen-Hunter
/s/ HAMILTON W. McKAY, JR. Director November 23, 1999
Hamilton W. McKay, Jr., M.D.
____________________ Director November __, 1999
George J. Morrow
/s/ ERIC B. MUNSON Director November 23, 1999
Eric B. Munson
____________________ Director November __, 1999
David E. Shi
/s/ JIMMY K. STEGALL Director November 23, 1999
Jimmy K. Stegall
/s/ H. ALLEN TATE, JR. Director November 23, 1999
H. Allen Tate, Jr.
____________________ Director November __, 1999
James L. Williamson
/s/ PHAIL WYNN, JR. Director November 23, 1999
Dr. Phail Wynn, Jr.
STONE STREET BANCORP, INC.
STOCK OPTION PLAN
THIS IS THE STOCK OPTION PLAN ("Plan") of Stone Street
Bancorp, Inc. (the "Corporation"), a North Carolina corporation,
with its principal office in Mocksville, Davie County, North
Carolina, adopted by the Board of Directors of the Corporation
and effective upon the approval of the Plan by the shareholders
of the Corporation, under which options may be granted from time
to time to eligible directors and employees of the Corporation,
Mocksville Savings Bank, Inc., SSB (the "Bank") and of any
corporation or other entity of which either the Corporation or
the Bank owns, directly or indirectly, not less than fifty
percent (50%) of any class of equity securities (a "Subsidiary"),
to purchase shares of common stock of the Corporation ("Common
Stock"), subject to the provisions set forth below:
1. PURPOSE OF THE PLAN. The purpose of the Plan is to aid
the Corporation, the Bank and any Subsidiary in attracting and
retaining capable directors and employees and to provide a long
range incentive for directors, employees and others to remain in
the management and service of the Corporation, the Bank or any
Subsidiary, to perform at increasing levels of effectiveness and
to acquire a permanent stake in the Corporation with the interest
and outlook of an owner. These objectives will be promoted
through the granting of options to acquire shares of Common Stock
pursuant to the terms of this Plan.
2. ADMINISTRATION. The Plan shall be administered by a
committee (the "Committee"), which shall consist of not less than
two members of the Board of Directors of the Corporation (the
"Board") who are "Non-Employee Directors" as defined in Rule l6b-
3(b)(3) of the Rules and Regulations under the Securities Act of
1934 (the "Exchange Act"). Members of the Committee shall serve
at the pleasure of the Board. In the absence at any time of a
duly appointed Committee, this Plan shall be administered by the
Board. The Committee may designate any officers or employees of
the Corporation, the Bank or any Subsidiary to assist in the
administration of the Plan and to execute documents on behalf of
the Committee and perform such other ministerial duties as may be
delegated to them by the Committee.
Subject to the provisions of the Plan, 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. By way of illustration and not of
limitation, the Committee shall have the discretion (a) to
construe and interpret the Plan and all options granted hereunder
and to determine the terms and provisions (and amendments
thereof) of the options granted under the Plan (which need not be
identical); (b) to define the terms used in the Plan and in the
options granted hereunder; (c) to prescribe, amend and rescind
the rules and regulations relating to the Plan; (d) to determine
the individuals to whom and the time or times at which such
options shall be granted, the number of shares to be subject to
each option, the option price, and the determination of leaves of
absence which may be granted to participants without constituting
a termination of their employment for the purposes of the Plan;
and (e) to make all other determinations necessary or advisable
for the administration of the Plan.
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 422 of the Internal Revenue Code of 1986,
as amended ("Incentive Stock Options") or which do not qualify as
Incentive Stock Options ("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 options granted
which fail to satisfy the requirements for Incentive Stock
Options shall become Nonqualified Stock Options.
3. STOCK AVAILABLE FOR OPTIONS. In the discretion of the
Committee, the stock to be subject to Options under the Plan
shall be authorized but unissued shares of Common Stock which are
issued directly to optionees upon exercise of options and/or
shares of Common Stock which are acquired by the Plan or the
Corporation in the open market. The total number of shares of
Common Stock for which Options may be granted under the Plan is
182,505 shares, which is ten percent (10%) of the total number of
shares of Common Stock issued by the Corporation in connection
with the conversion of the Bank into a North Carolina mutual
savings bank to a North Carolina stock savings bank on March 29,
1996 (the "Conversion"). Such number of shares is subject to any
capital adjustments as provided in Section 16. In the event that
an Option granted under the Plan is forfeited, released, 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 forfeiture, expiration,
release or termination date of an Option is beyond the term of
existence of the Plan as described in Section 21, then any shares
covered by forfeited, unexercised, released or terminated options
shall not reactivate the existence of the Plan and therefore may
not be available for additional grants under the Plan. The
Corporation, during the term of the Plan, will reserve and keep
available a number of shares of Common Stock sufficient to
satisfy the requirements of the Plan. In the discretion of the
Committee, the shares of Common Stock necessary to be delivered
to satisfy exercised options may be from authorized and unissued
shares of Common Stock or may be purchased in the open market.
4. ELIGIBILITY. Options shall be granted only to
individuals who meet all of the following eligibility
requirements:
(a) Such individual must be (i) an employee or a
member of the Board of Directors of the Corporation, the
Bank or a Subsidiary or (ii) a person serving as an advisor
or consultant to the Corporation, the Bank or a Subsidiary
or member of a committee appointed by the Board of
Directors of the Corporation or the Bank (a "corporate
consultant"). For this purpose, an individual shall be
considered to be an "employee" only if there exists between
the Corporation, the Bank or a Subsidiary 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) Such individual must have such knowledge and
experience in financial and business matters that he or she
is capable of evaluating the merits and risks of the
investment involved in the exercise of the Options.
2
(c) 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.
In determining the directors and employees 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 respective directors, employees and
corporate consultants, their present and potential contributions
to the success of the Corporation, the Bank and any Subsidiary
and such other factors as the Committee stall deem relevant. A
director, employee or corporate consultant who has been granted
an Option under the Plan maybe granted an additional Option or
Options under the Plan if the Committee shall so determine.
If, pursuant to the terms of the Plan, it is necessary that
the percentage of stock ownership of any individual be
determined, stock ownership in the Corporation or of a related
corporation which is owned (directly or indirectly) by or for
such individual's brothers and sisters (whether by the whole or
half blood), spouse, ancestors, and lineal descendants or by or
for any corporation, partnership, estate or trust of which such
employee is a shareholder, partner or beneficiary shall be
considered as owned by such director or employee.
5.OPTION AGREEMENT. Such Options shall be granted after the
date the Plan is approved by the Corporation's shareholders and
after execution by the optionee of a Stock Option Grant and
Agreement (the "Option Agreement") in the form attached hereto as
Exhibit A, as modified by the Committee to the extent it deems
such modification to be necessary or desirable. Such Options
shall be granted with the intention that they will be
Nonqualified Stock Options or Incentive Stock Options as
denominated in the Option Agreement. Any Option granted with the
intention that it will be an Incentive Stock Option but which
fails to satisfy a requirement for Incentive Stock Options shall
continue to be valid and shall be treated as a Nonqualified Stock
Option.
6.OPTION PRICE.
(a) 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
Option. In the case of incentive stock options granted to a
shareholder who owns stock possessing more than 10 percent
(10%) of the total combined voting power of all classes of
stock of the Corporation, the Bank or a Subsidiary (a "ten
percent shareholder"), the option price of each Option
granted under the Plan shall not be less than one hundred
and ten percent (110%) of the market value of the stock on
the date of grant of the Option. If the Common Stock is
listed on a national securities exchange (including for
this purpose the Nasdaq Stock Market, Inc. National Market)
on the date in question, then the market value per share
shall be not less than the average of the highest and
lowest selling price on such exchange on such date, or if
there were no sales on such date, then the market price per
share shall be equal to the average between the bid and
asked price on such date. If the Common Stock is traded
otherwise than on a national securities exchange (including
for this purpose the Nasdaq Stock Market, Inc. National
Market) on the date in question, then the market price per
share shall be equal to the average between the bid and
asked price on such date, or, if there is no bid and asked
price on such date,
3
then on the next prior business day on which there was a bid
and asked price. If no such bid and asked price is
available, then the market value per share shall be its fair
market value as determined by the Committee, in its sole and
absolute discretion. The Committee shall maintain a written
record of its method of determining such value.
(b) The option price shall be payable to the
Corporation either (i) in cash or by check, bank draft or
money order payable to the order of the Corporation, or
(ii) at the discretion of the Committee, through the
delivery of shares of the common stock of the Corporation
owned by the optionee with a market value (determined in a
manner consistent with (i) above) 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,
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 such
Option is granted. In the event an Incentive Stock Option is
granted to a ten percent shareholder, the expiration date or
dates of each Option shall be not later than five (5) years after
the date such Option is granted, The Committee, 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 in this
Section 7.
8. TERMS AND CONDITIONS OF OPTIONS.
(a) All Options must be granted within ten (10) years
of the Effective Date of this Plan as defined in Section
20.
(b) The Committee may grant Options which are
intended to be 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 (an Option Agreement) containing terms
and conditions established by the Committee consistent with
the provisions of this Plan.
(d) Not less than 100 shares may be purchased at any
one time unless the number purchased is the total number at
that time purchasable under the Plan.
(e) The recipient of an Option shall have no rights
as a shareholder 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 16.
(f) The aggregate fair market value of the stock
(determined as of the time the Option is granted) with
respect to which Incentive Stock Options are exercisable
for the
4
first time by any participant during any calendar year
(under all benefit plans of the Corporation, the Bank or any
Subsidiary, if applicable) shall not exceed $100,000;
provided, however, that such $100,000 limit of this
subsection (i) shall not apply to the grant of Nonqualified
Stock Options. The Committee may grant Options which are
exercisable in excess of the foregoing limitations, in which
case Options granted which are exercisable in excess of such
limitation shall be Nonqualified Stock Options.
(g) All stock obtained pursuant to an option which
qualifies as an Incentive Stock Option shall be held in
escrow for a period which ends on the later of (i) two (2)
years from the date of the granting of the Option or (ii)
one (1) year after the transfer of the stock pursuant to the
exercise of the Option. The stock shall be held by the
Corporation or its designee, The employee who has exercised
the Option shall during such holding period have all rights
of a shareholder, including but not limited to the rights to
vote, receive dividends and sell the stock. The sole purpose
of the escrow is to inform the Corporation of a
disqualifying disposition of the stock within the meaning.
of Section 422 of the Internal Revenue Code of 1986, as
amended, and it shall be administered solely for that
purpose.
9. EXERCISE OF OPTIONS.
(a) Unless otherwise set forth in the Option
Agreement, all Options granted to an optionee by virtue of
his position as a nonemployee director of the Corporation or
the Bank or corporate consultant (as stated in the Option
Agreement) shall be fully vested, exercisable and
nonforfeitable immediately at the time of the grant.
(b) Options granted to an optionee by virtue of his
position as an employee (as stated in the Option Agreement)
shall become vested and exercisable at the times, at the
rate and subject to such limitations as may be set forth in
the Option Agreement executed in connection therewith;
provided, however, that all outstanding and nonforfeited
options shall be exercisable, if not sooner, on the day
prior to the expiration date thereof.
Notwithstanding the foregoing, Options shall become
exercisable with respect to all of the shares subject
thereto upon the optionee's death, retirement or disability
within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended, and in the event of a
change in control as set forth in Section 13 of this Plan.
Any right to exercise Options in annual installments shall
be cumulative and any vested installments may be exercised,
in whole or in part, at the election of the optionee. The
exercise of any Option must be evidenced by written notice
to the Corporation that the optionee intends to exercise his
Option.
In no event shall an Option be deemed granted by the
Corporation or exercisable by a recipient prior to the
mutual execution by the Corporation and the recipient of an
Option Agreement which comports with the requirements of
Section 5 and Section 8(c).
5
(c) The inability of the Corporation or Bank to obtain
approval from any regulatory body or authority deemed by
counsel to be necessary to the lawful issuance and sale of
any shares of Common Stock hereunder shall relieve the
Corporation and the Bank of any liability in respect of the
non-issuance or sale of such shares. As a condition to the
exercise of an option, the Corporation may require the
person exercising the Option to make such representations
and warranties as may be necessary to assure the
availability of an exemption from the registration
requirements of federal or state securities laws.
(d) The Committee shall have the discretionary
authority to impose in the Option Agreements such
restrictions on shares of Common Stock as it may deem
appropriate or desirable, including but not limited to the
authority to impose a right of first refusal or to establish
repurchase rights or both of these restrictions.
(e) Notwithstanding anything to the contrary herein,
an optionee receiving the grant of an Option by virtue of
his or her position as a director, corporate consultant or
as an employee of the Corporation, the Bank or a Subsidiary
(as stated in the Option Agreement), shall be required to
exercise his or her Options within the periods set forth in
Sections 10, 11 and 12 below.
10. TERMINATION 0F EMPLOYMENT - EXCEPT BY DISABILITY
RETIREMENT OR DEATH. If any optionee receiving the grant of an
Option by virtue of his position as a director or corporate
consultant (as stated in the Option Agreement) ceases to be a
director or corporate consultant of at least one of the
Corporation, the Bank or any Subsidiary for any reason other than
death, retirement (as defined in Section 11) or disability (as
defined in Section 11) or if any optionee receiving the grant of
an Option by virtue of his position as an employee (as stated in
the Option Agreement) ceases to be an employee of at least one of
the Corporation, the Bank and any Subsidiary for any reason other
than death, retirement (as defined in Section 11) or disability
(as defined in Section 11), he may, (i) at any time within three
(3) months after his date of termination, but not later than the
date of expiration of the Option, exercise any Option designated
in the Option Agreement as an Incentive Stock Option and (ii) at
any time prior to the date of expiration of the Option, exercise
any option designated in the Option Agreement as a Nonqualified
Stock Option. However, in either such event the optionee may
exercise any Option only to the extent it was vested and he or
she was entitled to exercise the Option on the date of
termination. Any Options or portions of Options of terminated
optionees not so exercised shall terminate and be forfeited.
11. TERMINATION OF EMPLOYMENT - DISABILITY OR RETIREMENT.
If any optionee receiving the grant of an Option by virtue of his
position as a director or corporate consultant (as stated in the
Option Agreement) ceases to be a director or corporate consultant
of at least one of the Corporation, the Bank or any Subsidiary
due to his becoming disabled within the meaning of Section
22(e)(3) of the Internal Revenue Code of 1986, as amended, or if
any employee receiving the grant of an Option by virtue of his
position as an employee (as stated in the Option Agreement)
ceases to be employed by at least one of the Corporation, the
Bank and any Subsidiary due to his becoming disabled within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended, all unvested and forfeitable Options of such optionee
shall immediately become vested and nonforfeitable and he may,
(i) at
6
any time within 12 months after his date of termination, but not
later than the date of expiration of the Option, exercise any
option designated in the Option Agreement as an Incentive Stock
Option with respect to all shares subject thereto and (ii) at any
time prior to the date of expiration of the Option, exercise any
Option designated in the Option Agreement as a Nonqualified Stock
Option with respect to all shares subject thereto. Any portions
of Options of optionees who are terminated because they become
disabled which are not so exercised shall terminate.
If any optionee receiving the grant of an Option by virtue
of his position as a director or corporate consultant (as stated
in the Option Agreement) ceases to be a director or corporate
consultant of at least one of the Corporation, the Bank or any
Subsidiary due to his retirement, or if any employee receiving
the grant of an Option by virtue of his position as an employee
(as stated in the Option Agreement) ceases to be employed by at
least one of the Corporation, the Bank and any Subsidiary due to
his retirement, all unvested and forfeitable Options of such
optionee shall immediately become vested and nonforfeitable and
he may, at any time prior to the date of expiration of the
Option, exercise such Option; provided, however, that if the
Option is exercised more than three months after such retirement,
the Option may be treated as a Nonqualified Stock Option. Any
portions of Options of retired directors, corporate consultants
or employees not so exercised shall terminate. For purposes of
this Plan, the term "retirement," as it relates to any optionee
receiving a grant of an Option as a result of his or her position
as an employee of the Corporation, the Bank or any Subsidiary,
shall mean (i) the termination of the optionee's employment under
conditions which would constitute retirement under any tax
qualified retirement plan maintained by the Corporation, the Bank
or a Subsidiary, or (ii) termination of employment after
attaining age 65. The term "retirement," as it relates to any
optionee receiving a grant of an Option as a result of his or her
position as a director or corporate consultant, shall mean the
cessation of membership on such board of directors or cessation
of the relationship creating the corporate consultant status (i)
with the approval of such board of directors, at any time after
such optionee reaches age 65, or (ii) at the election of the
optionee at any time after not less than twenty-five (25) years
of service as a member of the such board of directors and/or as a
corporate consultant, as applicable.
12. TERMINATION OF EMPLOYMENT - DEATH, If an optionee
receiving the grant of an option by virtue of his position as a
director or corporate consultant (as stated in the Option
Agreement) dies while a director or corporate consultant of the
Corporation, the Bank or any Subsidiary or if any employee
receiving the grant of an option by virtue of his position as an
employee (as stated in the Option Agreement) dies while in the
employment of the Corporation, the Bank or a Subsidiary, all
unvested and forfeitable Options of such optionee shall
immediately become vested and nonforfeitable and the person or
persons to whom the Option is transferred by will or by the laws
of descent and distribution may exercise the Option at any time
until the term of the Option has expired, with respect to all
shares subject thereto, to the same extent and upon the same
terms and conditions the optionee would have been entitled to do
so had he lived. Any Options or portions of options of deceased
directors or employees not so exercised shall terminate.
13. CHANGE IN CONTROL. In the event that an optionee ceases to
be an employee, a director or corporate consultant of the
Corporation, the Bank or a Subsidiary (which
7
position resulted in his or her receipt of an option pursuant to
this Plan) for any reason after the occurrence of a "change in
control" and prior to the time that all shares allocated to him
or her would be 100% vested, nonforfeitable and exercisable in
accordance with Sections 9 and 10 above, then, notwithstanding
Sections 9 and 10 above, all Options granted to such optionee
shall immediately become fully vested and nonforfeitable. For
purposes of this Plan, a "change in control" shall mean (i) a
change in control of a nature that would be required to be
reported by the Corporation in response to Item 1 of the Current
Report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Exchange Act; (ii) such time as any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in
Rule l3d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation or Bank representing 25 percent or
more of the combined voting power of the outstanding Common Stock
of the Corporation or outstanding common stock of the Bank, as
applicable; or (iii) individuals who constitute the Board or the
board of directors of the Bank on the date hereof (the "Incumbent
Board" and "Incumbent Bank Board," respectively) cease for any
reason to constitute at least a majority thereof, provided that
any person becoming a director subsequent to the date hereof
whose election was approved by a vote of at least three-quarters
of the directors comprising the Incumbent Board or Incumbent Bank
Board, as applicable, or whose nomination for election by the
Corporation's or Bank's shareholders was approved by the
Corporation's or Bank's Board of Directors or Nominating
Committee, shall be considered as though he or she were a member
of the Incumbent Board or Incumbent Bank Board, as applicable; or
(iv) either the Corporation or the Bank consolidates or merges
with or into another corporation, association or entity or is
otherwise reorganized, where neither the Corporation nor the
Bank, respectively, is the surviving corporation in such
transaction; or (v) all or substantially all of the assets of
either the Corporation or the Bank are sold or otherwise
transferred to or are acquired by any other entity or group.
As set forth in Section 10, in the event of such a
termination after a change in control, the Optionee must exercise
any Incentive Stock Options within three (3) months after his
date of termination and may exercise any Nonqualified Stock
Options at any time prior to the date of expiration of the
Option.
14. STOCK APPRECIATION RIGHTS.
(a) General Terms and Conditions. The Committee may,
but shall not be obligated to, grant rights to optionees to
surrender an exercisable Option, or any portion thereof, in
consideration for the payment by the Corporation of an
amount equal to the excess of the market value (determined
asset forth in Section 6 above) of the shares of Common
Stock subject to the Option, or portion thereof,
surrendered over the exercise price of the Option with
respect to such shares (any such authorized surrender and
payment being hereinafter referred to as a "Stock
Appreciation Right"). Such payment, at the discretion of
the Committee, may be made in shares of Common Stock valued
at the then market value thereof (determined as set forth
in Section 6 above), or in cash, or partly in cash and
partly in shares of Common Stock.
The terms and conditions set with respect to a Stock
Appreciation Right may include (without limitation),
subject to other provisions of this Section 14 and this
Plan, the period during which, date by which or event upon
which the Stock Appreciation
8
Right may be exercised (which shall be on the same terms as
the Option to which is related); the method for valuing
shares of Common Stock for purposes of this Section 14; a
ceiling on the amount of consideration which the Corporation
may pay in connection with exercise of the Stock
Appreciation Right; and arrangements for income tax
withholding. The Committee shall have complete discretion to
determine whether, when and to whom Stock Appreciation
Rights may be granted.
(b) Time Limitations. A Stock Appreciation Right may
be exercised only within the period, if any, within which
the Option to which it relates may be exercised.
Notwithstanding the foregoing, any election by an optionee
to exercise Stock Appreciation Rights shall be made during
the period beginning on the third business day following
the release for publication of quarterly or annual
financial information required to be prepared and
disseminated by the Corporation pursuant to the
requirements of the Exchange Act and ending on the twelfth
business day following such date. The required release of
information shall be deemed to have been satisfied when the
specified financial data appears on or in a wire service,
financial news service or newspaper of general circulation
or is otherwise first made publicly available.
(c) Effects of Exercise of Stock Appreciation Rights
or Options. Upon the exercise of a Stock Appreciation
Right, the number of shares of Common Stock available under
the Option to which it relates shall decrease by a number
equal to the number of shares for which the Stock
Appreciation Right was exercised. Upon the exercise of an
Option, any related Stock Appreciation Right shall
terminate as to any number of shares of Common Stock
subject to the Stock Appreciation Right that exceeds the
total number of shares for which the Option remains
unexercised.
(d) Time of Grant. A Stock Appreciation Right granted
in connection with an Incentive Stock Option must be granted
concurrently with the Option to which is relates, while a
Stock Appreciation Right granted in connection with a
Nonqualified Stock Option may be granted concurrently with
the Option to which it relates or at any time thereafter
prior to the exercise or expiration of such Option. No
optionee shall have any Stock Appreciation Rights unless (i)
in the case of Incentive Stock Options and Nonqualified
Stock Options, the Stock Option Agreement shall so state or
(ii) in the case of Nonqualified Stock Options, the
Committee shall have executed an amendment to the Stock
Option Agreement so stating.
(e) Non-Transferable. A Stock Appreciation Right may
not be transferred or assigned except in connection with a
transfer of the Option to which it relates.
15. 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.
9
16. CAPITAL ADJUSTMENTS AFFECTING COMMON STOCK.
(a) If the outstanding shares of Common Stock of the
Corporation are increased, decreased, changed into or
exchanged for a different number or kind of shares or other
securities of the Corporation or another entity as a result
of a recapitalization, reclassification, stock dividend,
stock split, amendment to the Corporation's Certificate of
Incorporation, reverse stock split, merger or
consolidation, an appropriate adjustment shall be made in
the number and/or kind of securities allocated to the
Options and Stock Appreciation Rights 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) In the event that the Corporation shall declare
and pay any dividend with respect to the Common Stock
(other than a dividend payable in shares of the
Corporation's Common Stock or a regular quarterly cash
dividend), including a dividend which results in a
nontaxable return of capital to the holders of shares of
Common Stock for federal income tax purposes, or otherwise
than by dividend makes distribution of property to the
holders of its shares of Common Stock, the Committee, in
its discretion applied uniformly to all outstanding
Options, may adjust the exercise price per share of
outstanding Options in such a manner as the Committee may
determine to be necessary to reflect the effect of the
dividend or other distribution on the fair market value of
a share of Common Stock.
(c) To the extent that the foregoing adjustments
described in Sections 16(a) and (b) above relate to
particular Options or to particular stock or securities of
the Corporation 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 or Stock Appreciation Right
pursuant to this Plan shall not affect in any way the right
or power of the Corporation 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.
(f) Any adjustment made pursuant to this Section 16,
shall be made, to the extent practicable, in such manner as
not to constitute a modification of any outstanding
Incentive Stock Options within the meaning of Section
424(h) of the Internal Revenue Code of 1986, as amended.
17. INVESTMENT PURPOSE. At the discretion of the Committee,
any Option Agreement may provide that the optionee shall, by
accepting the Option, represent and agree, for himself and his
transferees by will or the laws of descent and distribution, that
all shares of stock
10
purchased upon the exercise of the Option will be acquired for
investment and not for resale or distribution, and that upon each
exercise of any portion of an Option, the person entitled to
exercise the same shall furnish evidence of such facts which is
satisfactory to the Corporation. Certificates for shares of stock
acquired under the Plan may be issued bearing such restrictive
legends as the Corporation and its counsel may deem necessary to
ensure that the optionee is not an "underwriter" within the
meaning of the regulations of the Securities Exchange Commission.
18. APPLICATION OF FUNDS. The proceeds received by the
Corporation from the sale of Common Stock pursuant to Options
will be used for general corporate purposes.
19. NO OBLIGATION TO EXERCISE. The granting of an Option
or Stock Appreciation Right shall impose no obligation upon the
optionee to exercise such Option or Stock Appreciation Right.
20. EFFECTIVE DATE OF PLAN. The Plan will become effective
upon the approval of the Plan by the shareholders of the
Corporation and receipt of any necessary regulatory approvals.
21. TERM OF PLAN. Options and Stock Appreciation Rights may
be granted pursuant to this Plan from time to time within ten
(10) years from the effective date of the Plan.
22. TIME OF GRANTING OF OPTIONS. Nothing contained in the
Plan or in any resolution adopted or to be adopted by the
Committee or the shareholders of the Corporation and no action
taken by the Committee shall constitute the granting of any
Option or Stock Appreciation Right hereunder. The granting of an
Option and Stock Appreciation Right pursuant to the Plan shall
take place only when an Option Agreement shall have been duly
executed and delivered by and on behalf of the Corporation at the
direction of the Committee.
23. CASH PAYMENTS. At the time of the payment of any
dividend or other distribution with respect to the Common Stock,
in the absolute discretion of, and upon direction of the Board,
the Corporation shall cause to be paid to existing directors,
corporate consultants and employees of the Corporation, the Bank
or any Subsidiary who hold nonforfeited, unexercised Options
under this Plan, regardless of whether or not such Options are
vested and nonforfeitable, a cash amount equal to the number of
shares of Common Stock subject to nonforfeited, unexercised
options held by such optionee multiplied by the amount of any
dividends or other distributions paid per share of Common Stock
outstanding. The Board shall have the discretion to approve cash
payments at the time of some dividends or distributions but not
others. Notwithstanding the foregoing, no amounts shall be paid
to optionees pursuant to this Section 23 with respect to any
dividend or distribution if at the time of such dividend or
distribution, the exercise price of the Options shall have been
reduced pursuant to Section 16(b) above.
If any director, corporate consultant or employee of the
Corporation, the Board or any Subsidiary shall receive any cash
payment from the Company, the Board or any Subsidiary pursuant to
this Section 23 with respect to an Option which is not vested and
exercisable, and if such Option shall be forfeited, then within
30 days after the effective date of such forfeiture, the optionee
shall pay to the Corporation, the Bank or the Subsidiary (as
applicable) an amount equal
11
to the cash payment received by such optionee with respect to
such forfeited Option. In the alternative, at the option of the
Corporation, the Bank or the Subsidiary (as applicable) the
amount to be repaid may be withheld from the final compensation
payable to the optionee.
24. WITHHOLDING TAXES. Whenever the Corporation proposes or
is required to cause to be issued or transferred shares of stock,
cash or other assets pursuant to this Plan, the Corporation shall
have the right to require the optionee to remit to the
Corporation an amount sufficient to satisfy any Federal, state
and/or local withholding tax requirements prior to the issuance
of any certificate or certificates for such shares or delivery of
such cash or other assets. Alternatively, the Corporation may
issue or transfer such shares of stock or make other
distributions of cash or other assets net of the number of shares
or other amounts sufficient to satisfy the withholding tax
requirements. For withholding tax purposes, the shares of stock,
cash and other assets to be distributed shall be valued on the
date the withholding obligation is incurred.
25. TERMINATION AND AMENDMENT. The Board may at any time
alter, suspend, terminate or discontinue the Plan, subject to any
applicable regulatory requirements and any required stockholder
approval or any stockholder approval which the Board may deem
advisable for any reason, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax,
securities or other laws or satisfying applicable stock exchange
or quotation system listing requirements. The Board may not,
without the consent of the holder of an Option or Stock
Appreciation Right previously granted, make any alteration which
would deprive the optionee of his rights with respect thereto.
26. CAPTIONS AND HEADINGS: GENDER AND NUMBER. Captions and
paragraph headings used herein are for convenience only, do not
modify or affect the meaning of any provision herein, are not a
part, and shall not serve as a basis for interpretation or
construction of this Plan. As used herein, the masculine gender
shall include the feminine and neuter, and the singular number
shall include the plural, and vice versa, whenever such meanings
are appropriate.
27. COST OF PLAN; EXCULPATION AND INDEMNIFICATION. All
costs and expenses
incurred in the operation and administration of the Plan shall be
borne by the Corporation, the Bank and the Subsidiaries. In
connection with this Plan, no member of the Board, no member of
the Board of Directors of the Bank, and no member of the Board of
Directors of any Subsidiary, and no member of the Committee shall
be personally liable for any act or omission to act, nor for any
mistake in judgment made in good faith, unless arising out of, or
resulting from, such persons own bad faith, willful misconduct or
criminal acts. To the extent permitted by applicable law and
regulation, the Corporation shall indemnify, defend and hold
harmless the members of the Board, the members of the Board of
Directors of the Bank and the members of the Board of Directors
of any Subsidiary, and members of the Committee, and each other
officer or employee of the Bank, the Corporation or of any
Subsidiary to whom any power or duty relating to the
administration or interpretation of this Plan may be assigned or
delegated, from and against any and all liabilities (including
any amount paid in settlement of a claim with the approval of the
Board), and any costs or expenses (including counsel fees)
incurred by such persons arising out of or as a result of, any
act or omission to act, in connection with the
12
performance of such person's duties, responsibilities and
obligations under this Plan, other than such liabilities, costs,
and expenses as may arise out of; or result from the bad faith,
willful misconduct or criminal acts of such persons.
28. GOVERNING LAW. Without regard to the principles of
conflicts of laws, the laws of the State of North Carolina shall
govern and control the validity, interpretation, performance, and
enforcement of this Plan.
29. INSPECTION OF PLAN. A copy of this Plan, and any
amendments thereto, shall be maintained by the Secretary of the
Corporation and shall be shown to any proper person making
inquiry about it.
30. OTHER PROVISIONS, The Option Agreements authorized
under this Plan shall contain such other provisions not
inconsistent with the foregoing, including, without limitation,
increased restrictions upon the exercise of options, as the
Committee may deem advisable.
13
EXHIBIT A
STOCK OPTION GRANT AND AGREEMENT
THIS STOCK OPTION GRANT AND AGREEMENT ("Agreement"), being
made according to and subject to the terms and conditions of the
STOCK OPTION PLAN of Stone Street Bancorp, Inc. ("Plan"), a copy
of which is attached hereto as Annex A and is hereby incorporated
by reference and made a part of this Agreement, is herein
executed and effective the ________ day of ___________, _____,
between Stone Street Bancorp, Inc. (the "Corporation") and
("Optionee"):
1.Grant. As of the above date, the Corporation hereby grants
to the Optionee (applicable provisions are marked):
___ An Incentive Stock Option [as that term is defined in
Section 422
of the Internal Revenue Code of 1986, as amended (the
"Code")] to purchase ____ shares of Common Stock of the
Corporation at the price stated in this Agreement;
___ Nonqualified Stock Option to purchase __________ shares
of Common Stock of the Corporation at the price stated in
this Agreement.
The Optionee ___ shall ___ shall not have Stock Appreciation
Rights in connection with the Options granted hereby, in
accordance with Section 14 of the Plan.
The Option(s) and any Stock Appreciation Rights granted
under this section and as described in this Agreement is
(are) in all respects subject to and conditioned by the
terms, definitions, and provisions of this Agreement and of
the Plan. Capitalized terms in this Agreement which are not
otherwise defined but which are defined in the Plan shall
have the same meaning given to those terms in the Plan.
The Optionee has been granted Options under the Plan as a
result of the Optionee's position as a ___ director ___
employee ___ corporate consultant of the Corporation, the
Bank or a Subsidiary.
2.Price. The Option price is $_______ for each share.
3.Exercise of Option. The Option(s) granted under this
Agreement shall be exercisable pursuant to the terms and
conditions of the Plan and as set forth below:
(a) Right to Exercise: In addition to the terms and
conditions imposed on the Optionee's right to exercise his
Options and any Stock Appreciation Rights imposed in the
Plan, the following terms and conditions are applicable:
____________________________________________________________
____________________________________________________________
(b) ___ (Marked if applicable) Annual Installments: Subject
to the terms and conditions of the Plan, the Incentive Stock
Options can be exercised in annual installments as follows:
_________ shares beginning on ______________, 19__
_________ shares beginning on ______________, 19__
_________ shares beginning on ______________, 19__
_________ shares beginning on ______________, 19__
_________ shares beginning on ______________, 19__
Subject to the terms and conditions of the Plan, the
Nonqualified Options can be exercised in annual installments
as follows:
_________ shares beginning on ______________, 19__
_________ shares beginning on ______________, 19__
_________ shares beginning on ______________, 19__
_________ shares beginning on ______________, 19__
_________ shares beginning on ______________, 19__
The right to exercise the Option(s) in annual installments
shall be cumulative. In addition, the option(s) shall be
exercisable upon disability, death, retirement and a change
in control as set forth in the Plan.
(c)___(Marked if applicable) Immediate Vesting: Subject to
the terms and conditions of the Plan, all of the Options are
vested, nonforfeitable and exercisable.
(d) Method of Exercise: The Options and any Stock Appreciation
Rights granted under this Agreement shall be exercisable by a
written notice to the Secretary of the Corporation which shall:
(1) State the election to exercise the Option
or the election to surrender an exercisable
Option and exercise Stock Appreciation. Rights,
the number of shares in respect of which the
Option or Stock
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Appreciation Right is being exercised, the
person in whose name any stock certificate or
certificates for such shares of Common Stock is
to be registered or to whom any cash is to be
paid, his or her address, and social security
number;
(2) Contain any such representation and
agreements as to Optionee's investment intent
with respect to shares of Common Stock as may
be required by the Committee;
(3) Be signed by the person entitled to
exercise the Option and, if the Option is being
exercised by any person or persons other than
the Optionee, be accompanied by proof,
satisfactory to the Corporation, of the right
of such person or persons to exercise the
Option or Stock Appreciation Rights in
accordance with the Plan; and
(4) Be accompanied by payment of the purchase
price of any shares with respect to which the
Option is being exercised which payment shall
be in form acceptable to the Committee pursuant
to Section 6(b) of the Plan.
(e) Representations and Warranties: In order to exercise an
Option or Stock Appreciation Right, the person exercising
the Option or Stock Appreciation Right must make the
representations and warranties to the Corporation as may be
required by any applicable law or regulation, or as may
otherwise be required pursuant to the Plan.
(f) Approvals. In order for an Option or Stock Appreciation
Right to be exercised, all filings and approvals required
by applicable law and regulations or pursuant to the Plan
must have been made and obtained.
4. Non-transferability. Neither any Option nor any Stock
Appreciation Rights may be transferred in any manner
otherwise than by will or the laws of descent and
distribution and such Option and any Stock Appreciation
Rights may be exercised during the life of the Optionee
only by him or her.
5. This Option and any Stock Appreciation Rights may not be
exercised if the issuance of shares or payment of cash upon
such
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exercise would constitute a violation of any applicable
federal or state securities law or other law or valid
regulation.
6. Expiration. This Option and any corresponding Stock
Appreciation Rights shall expire on _____________,
_________.
7. Escrow. All stock purchased pursuant to an Incentive Stock
Option shall be held in escrow for a period which ends on
the later of (i) two (2) years from the date of the
granting of the option or (ii) one (1) year after the
transfer of the stock pursuant to the exercise of the
Option. The stock shall be held by the Corporation or its
designee. The Optionee who has exercised the Option shall
have all rights of a stockholder, including, but not
limited to, the rights to vote, receive dividends and sell
the stock. The sole purpose of the escrow is to inform the
Corporation of a disqualifying disposition of the stock
within the meaning of Section 422 of the Code, and it shall
be administered solely for this purpose.
8. Repayment of Cash Payments. If the Optionee hereunder
forfeits any Options pursuant to the Plan, the Optionee
shall, within 30 days after the effective date of such
forfeiture, pay the Corporation, the Bank or a Subsidiary
(as applicable) an amount equal to the cash payments
received by the Optionee from the Corporation, the Bank or
any Subsidiary with respect to such forfeited Options
pursuant to Section 23 of the Plan. In the alternative, at
the option of the Corporation, the Bank or a Subsidiary,
the amount to be repaid may be withheld by the Corporation,
the Bank or a Subsidiary from the final compensation or
fees payable to the Optionee. Each acceptance by an
Optionee of cash payments pursuant to such Section 23 with
respect to Options still subject to forfeiture shall
constitute a reaffirmation of the agreements set forth in
this paragraph 8.
9. Tax Withholding. All stock, cash and other assets
distributed pursuant to this Agreement shall be subject to
applicable federal, state and local withholding for taxes.
The Optionee expressly acknowledges and agrees to such
withholding. The Optionee acknowledges and agrees to the
tax withholding provisions which are set forth in the Plan.
10. Resolution of Disputes. Any dispute or disagreement which
should arise under, or as a result of, or in any way relate
to, the interpretation, construction, or application of
this Agreement or the Plan will be determined by the
Committee designated in Section 2 of the Plan. Any
determination made by such Committee shall be final,
binding, and conclusive for all purposes.
11. Construction Controlled by Plan, The Options and any
corresponding Stock Appreciation Rights evidenced hereby
shall be subject to all of the
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requirements, conditions and provisions of the Plan. This
Agreement shall be construed so as to be consistent with
the Plan; and the provisions of the Plan shall be deemed to
be controlling in the event that any prevision should
appear to be inconsistent therewith.
12. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be
valid and enforceable under applicable law, but if any
provision of this Agreement is determined to be
unenforceable, invalid or illegal, the validity of any
other provision or part thereof shall not be affected
thereby and this Agreement shall continue to be binding on
the parties hereto as if such unenforceable, invalid or
illegal provision or part thereof had not been included
herein.
13. Modification of Agreement; Waiver. This Agreement may be
modified, amended, suspended or terminated, and any terms,
representations or conditions may be waived, but only by a
written instrument signed by each of the parties hereto and
only subject to the limitations set forth in the Plan. No
waiver hereunder shall constitute a waiver with respect to
any subsequent occurrence or other transaction hereunder or
of any other provision.
14. Captions and Headings: Gender and Number. Captions and
paragraph headings used herein are for convenience only, do
not modify or affect the meaning of any provision herein,
are not a part, and shall not serve as a basis for
interpretation or construction, of this Agreement. As used
herein, the masculine gender shall include the feminine and
neuter, and the singular number shall include the plural,
and vice versa, whenever such meanings are appropriate.
15. Governing Law; Venue and Jurisdiction. Without regard to
the principles of conflicts of laws, the laws of the State
of North Carolina shall govern and control the validity,
interpretation, performance, and enforcement of this
Agreement.
16. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the Corporation, and its
successors and assigns, and shall be binding upon and inure
to the benefit of the Optionee, and his or her heirs,
legatees, personal representative, executor, administrator
and permitted assigns.
17. Entire Agreement. This Agreement and the Plan constitute
and embody the entire understanding and agreement of the
parties hereto and, except as otherwise provided hereunder,
there are no other agreements or understandings, written
or oral, in effect between the parties hereto relating to
the matters addressed herein.
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18. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered
shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have set their hands and
seals the day and year first above written.
ATTEST: STONE STREET BANCORP, INC.
By:__________________________
(Corporate Seal) __________________ President
OPTIONEE:
________________________________
(SEAL)
