<PAGE>
As filed with the Securities and Exchange Commission
on February 21, 1995
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
SECURITY CAPITAL BANCORP
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
North Carolina 56-1354694
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
</TABLE>
507 West Innes Street
Post Office Box 1387
Salisbury, North Carolina 28145-1387
(704) 636-3775
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
SECURITY CAPITAL BANCORP
OMNIBUS STOCK OWNERSHIP
AND LONG TERM INCENTIVE PLAN
(Full title of the Plan)
____________________
<TABLE>
<CAPTION>
<S> <C>
DAVID B. JORDAN ROBERT A. SINGER
Vice-Chairman and Chief Executive Officer CATHERINE T. McGEE
Security Capital Bancorp Brooks, Pierce, McLendon,
507 West Innes Street Humphrey & Leonard, L.L.P.
Post Office Box 1387 2000 Renaissance Plaza
Salisbury, North Carolina 28145-1387 Greensboro, North Carolina 27401
(704) 636-3775 (910) 373-8850
(Names and addresses, including zip code, and telephone number, including area code, of agents for service)
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price Aggregate Offering Registration
Per Share Price Fee
<S> <C> <C> <C> <C>
Common Stock,
no par value . . 300,000 * * $1771.55
</TABLE>
*The shares are to be offered at prices not presently determinable.
Pursuant to Rule 457(c), fee is calculated on the basis of the high and low
sales prices of the Common Stock, as reported on the Nasdaq Stock
Market, Inc. (National Market System) on February 16, 1995.
<PAGE>
SECURITY CAPITAL BANCORP
CROSS-REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K
<TABLE>
<CAPTION>
Item in Caption or Location
Form S-8 in Prospectus
<S> <C>
1 Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus . . Front Cover Page
2 Inside Front and Outside Back Cover Pages of
Prospectus . . . . . . . . . . . . . . . . Inside Front Cover Page; Available
Information; Incorporation of Certain
Documents by Reference; Table of Contents;
Outside Back Cover Page
3 General Information Regarding the Plan . . . Outside Front Cover Page of Prospectus; The
Corporation; The Plan -- General
Information; -- Administration;
-- Eligibility and Participation; --
Rights That May Be Granted; -- Restrictions
on Transfer or Resale; --Amendment and
Termination; --Federal Income Tax
Consequences
4 Securities to be Offered . . . . . . . . . . Outside Front Cover Page of Prospectus; The
Plan -- General Information; -- Rights
That May be Granted; -- Restrictions on
Transfer or Resale
5 Employees Who May Participate in the Plan. . . The Plan -- General Information;
-- Eligibility and Participation
6 Purchase of Securities Pursuant to the Plan
and Payment for Securities Offered . . . . . The Plan -- General Information; -- Rights
That May be Granted;
7 Resale Restrictions . . . . . . . . . . . . . The Plan -- Restrictions on Transfer or
Resale
8 Tax Effects of Plan Participation . . . . . The Plan -- Federal Income Tax Consequences
9 Investment of Funds . . . . . . . . . . . . Not Applicable
10 Withdrawal from the Plan; Assignment of
Interest . . . . . . . . . . . . . . . . . The Plan -- Rights That May be Granted;
-- Restrictions on Transfer or Resale;
-- Termination and Forfeiture of Rights
11 Forfeitures and Penalties . . . . . . . . . The Plan -- Rights That May be Granted;
-- Termination and Forfeiture of Rights
12 Charges and Deductions and Liens Therefor . . The Plan; -- General Information; -- Rights
That May be Granted
13 Registration Information and Employee Plan
Annual Information . . . . . . . . . . . . Summary; Available Information
</TABLE>
<PAGE>
PROSPECTUS
(Security Capital logo appears here)
SECURITY CAPITAL
B A N C O R P
300,000 Shares of Common Stock
(No Par Value)
Offered as Set Forth Herein Pursuant to the Corporation's
Omnibus Stock Ownership and Long Term Incentive Plan
Security Capital Bancorp (the "Corporation") is offering up
to 300,000 shares of its common stock, no par value (the "Common
Stock"), in accordance with the terms and conditions of the
Security Capital Bancorp Omnibus Stock Ownership and Long Term
Incentive Plan (the "Omnibus Plan"). Proceeds from the sale of
the Common Stock to participants under the Omnibus Plan will be
added to the general funds of the Corporation and may be used for
general corporate purposes.
Although no arrangement has been made for the resale of any
of the shares covered by this Prospectus, it is anticipated that
such shares may be sold from time to time at the prevailing market
price at the time of sale without the payment of underwriting
commissions or discounts other than brokers' fees normally paid in
connection with normal brokers' transactions. The Corporation
will not receive any proceeds from the resale of such shares by
Omnibus Plan participants. Such resales may be subject to certain
restrictions. See "The Plan -- Restrictions on Transfer or
Resale".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is February 21, 1995.
<PAGE>
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . . 3
Incorporation of Documents by Reference . . . . . . . . . 3
The Corporation . . . . . . . . . . . . . . . . . . . . . 4
The Plan . . . . . . . . . . . . . . . . . . . . . . . .. 5
General Information . . . . . . . . . . . . . . . . 5
Administration . . . . . . . . . . . . . . . . . . . 6
Eligibility and Extent of Participation . . . . . . . 6
Rights That May be Granted . . . . . . . . . . . . . 7
Expiration and Forfeiture of Rights . . . . . . . . . 10
Amendment and Termination . . . . . . . . . . . . . . 12
Restrictions on Transfer or Resale . . . . . . . . . 12
Outstanding Options . . . . . . . . . . . . . . . . . 14
Federal Income Tax Consequences . . . . . . . . . . 15
Annual Report to Shareholders . . . . . . . . . . . . . . . 18
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONJUNCTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER AT ANY TIME SHALL
UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF.
<PAGE>
AVAILABLE INFORMATION
The Corporation has filed with the COMMISSION a Registration
Statement on Form S-8 under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Common Stock offered
hereby. As permitted by the rules and regulations of the
COMMISSION, this Prospectus does not contain all the information
set forth in the Registration Statement and the exhibits thereto.
For further information, reference is hereby made to the
Registration Statement, including the exhibits thereto. Any
person to whom a copy of this Prospectus is delivered, upon
written or oral request, may obtain without charge a copy of all
information incorporated by reference in the Registration
Statement (other than exhibits thereto unless such exhibits are
specifically incorporated by reference into the information the
Registration Statement incorporates) by contacting Pressley A.
Ridgill, Chief Financial Officer of the Corporation, at Security
Capital Bancorp, 507 West Innes Street, Post Office Box 1387,
Salisbury, North Carolina 28145-1387, Telephone (704) 855-6127.
The Corporation is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements
and other information with the COMMISSION. The Registration
Statement and all such reports, proxy statements and other
information can be examined and copied at the public reference
facilities of the COMMISSION located at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549 and at the regional offices of
the SEC at 7 World Trade Center, Suite 1300, New York, New York
10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such
materials can be obtained by mail from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Corporation's Common Stock is
qualified for quotation on the Nasdaq National Market under the
symbol "SCBC". The statements contained in this Prospectus as to
the contents of any contract or other document filed as an exhibit
to the Registration Statement are, of necessity, brief
descriptions thereof and are not necessarily complete; each such
statement is qualified by reference to such contract or document.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the
SEC pursuant to Section 13 of the Exchange Act (SEC File No. 0-
12359) are incorporated herein by reference and made a part
hereof: (a) the Corporation's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1994, June 30, 1994 and September 30,
1994; (b) the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1993; (c) the Corporation's Current
Reports on Form 8-K dated February 1, 1994, April 13, 1994,
September 28, 1994, November 8, 1994 and December 6, 1994; and (d)
the description of the Common Stock contained in the Corporation's
Current Report on Form 8-K dated July 12, 1983, as amended by its
Form 8-K/A1 dated January 30, 1995.
3
<PAGE>
In addition, all other documents filed by the Corporation
with the COMMISSION pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and
prior to the filing of a post-effective amendment which indicates
that all securities registered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference herein and to be a part hereof
from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement
contained herein or any other subsequently filed document which
also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Corporation will promptly provide without charge to each
person to which this Prospectus is delivered, upon written or oral
request, a copy of any or all of the documents incorporated herein
by reference (other than exhibits to such documents which are not
specifically incorporated by reference in such documents).
Requests for such copies should be directed to Pressley A.
Ridgill, Chief Financial Officer, Security Capital Bancorp, 507
West Innes Street, Post Office Box 1387, Salisbury, North Carolina
28145-1387, (Telephone (704) 855-6127).
THE CORPORATION
Security Capital Bancorp is a registered bank holding
company incorporated under the laws of the State of North
Carolina. Its business consists of owning and controlling
Security Capital Bank ("Security Capital Bank"), a North Carolina
chartered commercial bank headquartered in Salisbury, North
Carolina, and three North Carolina state savings banks: Citizens
Savings, Inc., SSB ("Citizens Savings"), headquartered in Concord,
North Carolina; Home Savings Bank, Inc. SSB ("Home Savings"),
headquartered in Kings Mountain, North Carolina; and OMNIBANK,
Inc., A State Savings Bank ("OMNIBANK"), headquartered in
Salisbury, North Carolina. The Corporation also owns one non-
banking subsidiary, Estates Development Corporation, a North
Carolina corporation which formerly engaged in real estate
activities.
The Corporation was incorporated in 1983 in connection with
a corporate reorganization (the "Reorganization") that resulted in
Security Capital Bank becoming a wholly-owned subsidiary of the
Corporation. On June 30, 1992, Omni Capital Group, Inc. ("Omni")
was merged with and into the Corporation. As a result of the
Merger, the Corporation adopted and assumed certain existing
option plans maintained by Omni and certain of its subsidiaries
prior to the Merger (the "Prior Plans"). Although no options
currently are being granted under the Prior Plans, all options
outstanding under the Prior Plans at the time of the Merger to
acquire Omni common stock were converted into options to acquire
the Corporation's Common Stock. See "OUTSTANDING OPTIONS."
4
<PAGE>
The Corporation's principal executive offices are located at
507 West Innes Street, Salisbury, North Carolina 28145. Its
telephone number is (704) 636-3775.
THE PLAN
General Information
The Corporation's directors and shareholders have adopted
and approved the Corporation's Omnibus Stock Ownership and Long
Term Incentive Plan (the "Omnibus Plan") for the purpose of
attracting and retaining in the Corporation's employment persons
of outstanding ability and to provide executive and other key
employees of the Corporation and its subsidiaries greater
incentive to make material contributions to the success of the
Corporation by providing them with stock and/or stock-based
compensation which may increase in value based upon the market
performance of the Common Stock and/or the corporate achievement
of financial and other performance objectives. The Omnibus Plan
is intended to replace the Prior Plans established by Omni and
assumed and adopted by the Corporation in connection with the
Merger. See "THE CORPORATION" herein. The Omnibus Plan is not
subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA") or the qualification requirements
of Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code").
The Corporation initially has reserved 300,000 shares of
Common Stock for issuance pursuant to Rights (as defined below)
granted under the Omnibus Plan. In the event the outstanding
shares of the Corporation's Common Stock are increased, decreased,
changed into or exchanged for a different number or kind of
securities as a result of a stock split, reverse stock split,
stock dividend, recapitalization, merger, share exchange
acquisition, or reclassification, appropriate proportionate
adjustments will be made in (i) the aggregate number or kind of
shares which may be issued pursuant to exercise of, or which
underlie, Rights; (ii) the exercise or other purchase price, or
base value, and the number and/or kind of shares acquirable under,
or underlying, Rights; and (iii) rights and matters determined on
a per share basis under the Omnibus Plan. Any such adjustment
will be made by the Personnel and Compensation Committee of the
Corporation's Board of Directors (the "Plan Committee"), subject
to ratification by the full Board of Directors. No such
adjustment will be required by reason of the issuance of Common
Stock, or securities convertible into Common Stock, by the
Corporation for cash or the issuance of shares of Common Stock by
the Corporation in exchange for shares of the capital stock of any
corporation, financial institution or other organization acquired
by the Corporation or a subsidiary thereof in connection
therewith. The total number of shares of Common Stock as to which
Rights may be granted may not exceed 300,000 shares, as such
number of shares may be adjusted from time to time as set forth
above. Any shares of Common Stock allocated to Rights granted
under the Omnibus Plan, which Rights are subsequently cancelled or
forfeited, will be available for further allocation upon such
cancellation or forfeiture.
5
<PAGE>
Additional information regarding the Omnibus Plan and its
administration may be obtained from the Corporation at its
principal offices located at 507 West Innes Street, Salisbury,
North Carolina 28145, telephone number (704) 636-3375.
Administration
The Omnibus Plan is administered by the Plan Committee. The
Plan Committee meets, and will continue to meet, the standards of
Rule 16b-3(c)(2)(i) promulgated by the COMMISSION under the
Exchange Act. No member of the Board will be appointed to the
Plan Committee who is, or within the preceding year has been,
eligible to receive Rights under the Omnibus Plan. The members of
the Plan Committee are appointed by, and serve at the pleasure of,
the Board of Directors, which may fill vacancies, however caused,
on the Plan Committee. Directors of the Corporation are elected
for three-year terms; however, the term of office of a member of
the Plan Committee may exceed three years if such member is
reelected to the Board of Directors and continues to serve or is
reappointed as a member of the Plan Committee. A majority of the
members of the Plan Committee constitute a quorum, and all actions
of the Plan Committee must be taken by not less than a majority of
its members.
Subject to the terms of the Omnibus Plan, the Plan
Committee, in its capacity as administrator of the Omnibus Plan,
has complete authority in its discretion to construe and interpret
the Omnibus Plan, to determine the terms and provisions of Rights
to be granted under the Omnibus Plan, to define the terms used in
the Omnibus Plan and in the Rights granted thereunder, to
prescribe, amend and rescind rules and regulations relating to the
Omnibus Plan, to determine the individuals to whom and the times
at which Rights shall be granted and the number of shares to be
subject to, or to underlie, each Right awarded, and to make all
other determinations necessary or advisable for the administration
of the Omnibus Plan. Each grant of a Right must be evidenced by a
written agreement containing such terms and conditions consistent
with the Omnibus Plan as the Plan Committee may determine.
Notwithstanding the foregoing, or any other provision of the Plan,
the Plan Committee has no authority to grant Rights to any of its
members, whether or not approved by the Board, or to determine any
matters, or exercise any discretion, to the extent that the power
to make such determinations or to exercise such discretion would
cause one or more members of the Plan Committee no longer to be
"disinterested directors" within the meaning of Rule 16b-3.
Subject to the provisions of Rule 16b-3(c)(2)(i), the Plan
Committee may designate any officers or employees of the
Corporation or any subsidiary thereof to assist in the
administration of the Omnibus Plan, to execute documents on behalf
of the Plan Committee and to perform such other ministerial duties
as may be delegated to them by the Plan Committee.
Eligibility and Participation
Full time employees of the Corporation and its subsidiaries
who are within designated job grade classifications under the
Corporation's salary administration plan ("Eligible Employees")
and who are designated as eligible participants by the Plan
Committee may receive awards of Rights
6
<PAGE>
under the Omnibus Plan. Currently, all employees of the Corporation
and its subsidiaries who are full time employees having a job grade
classification of class 20 or higher, and otherwise meeting the
eligibility requirements of the Omnibus Plan, are Eligible Employees.
At present, approximately twelve Eligible Employees,
including Lloyd G. Gurley, the President and Chief Administrative
Officer of the Corporation and a member of the Corporation's Board
of Directors, have been designated as participants under the
Omnibus Plan. Options (as defined below) to acquire a total of
71,000 shares of Common Stock have been granted to these twelve
participants, with 30,000 Options being granted to Mr. Gurley.
Rights That May Be Granted
Under the Omnibus Plan, the Plan Committee may grant
eligible participants options to acquire shares of the
Corporation's Common Stock, awards of rights to receive
"restricted" shares of Common Stock, awards of long term incentive
units (each equivalent in value to one share of Common Stock),
and/or awards of stock appreciation rights (each equivalent to the
cash value of one share of Common Stock). These options and
awards are referred to herein as the "Rights." All Rights must be
granted or awarded on or before April 28, 2004.
Options. Options to acquire Common Stock granted under the
Omnibus Plan ("Options") may be either incentive stock options
("ISOs") or non-qualified options ("NSOs"). The exercise price of
an Option may not be less than 100% of the market price per share
for the Corporation's Common Stock (the "Fair Market Value") on
the date of grant. For so long as the Common Stock is traded
over-the-counter and classified as a national market issue, the
Fair Market Value will be determined on the basis of the last-
transaction price quoted by the National Market System of the
Nasdaq Stock Market, Inc. ("Nasdaq"). In the case of any ISO
granted to a shareholder of the Corporation owning more than ten
(10%) of the total combined voting power of all classes of capital
stock of the Corporation (a "10% Shareholder"), the exercise price
may not be less than one hundred and ten percent (110%) of the
Fair Market Value.
The Omnibus Plan provides that the Plan Committee, in its
discretion, may establish that the exercise price of an Option
will be adjusted, upward or downward, on a quarterly basis, based
on the market value performance of the Common Stock in comparison
with the aggregate market value performance of one or more indices
of publicly-traded financial institutions and financial
institution holding companies deemed by the Plan Committee to be
similar to the Corporation in asset size, capitalization, trading
volumes, etc. ("Index" or "Indices"); provided, however, that
certain provisions of the Code may limit the Plan Committee's
ability to make the exercise price of ISOs adjustable. The Plan
Committee may utilize Indices published by third parties and/or
may construct one or more Indices meeting the above-described
characteristics. All such Indices must include no fewer than 15
companies.
The exercise price of an Option is payable to the
Corporation on the date of purchase either (i) in United States
dollars, in cash or by check, bank draft or money order payable to
the order of
7
<PAGE>
the Corporation, or (ii) in the discretion of the
Plan Committee, by delivery of outstanding shares of Common Stock
owned by the participant with a Fair Market Value as of the date
of delivery equal to the exercise price, or (iii) in the
discretion of the Plan Committee, by a combination of (i) and (ii)
above. Not less than 100 shares of Common Stock may be purchased
at any one time through the exercise of Options unless the number
of shares purchased is the total number purchasable at that time
under all Options granted to the optionee, and no shares of stock
will be delivered until full payment has been made.
The Plan Committee determines the expiration date of each
Option granted, up to a maximum of ten years from the date of
grant. In the Plan Committee's discretion, it may specify the
period or periods of time within which each Option will first
become exercisable, which period or periods may be accelerated or
shortened by the Plan Committee; provided, however, that the
vesting period, if any, for each Option must be at least two
years. Options granted under the Omnibus Plan are also subject to
termination upon Death, Disability, Retirement or Just Cause
Termination (as these terms are defined in the Omnibus Plan). See
"THE PLAN -- Expiration and Forfeiture of Rights."
Restricted Stock. The Plan Committee may award Rights to
acquire shares of Common Stock subject to certain transfer
restrictions ("Restricted Stock") to eligible participants under
the Omnibus Plan for such purchase price per share of Restricted
Stock as the Plan Committee, in its discretion, may determine
appropriate. All shares of Restricted Stock awarded are deemed
"unvested" (i.e., not available for purchase by the recipient of
the award) and may become "vested" (i.e., available for purchase)
as follows: (i) on the first anniversary of the date of the award,
if the award recipient remains an employee of the Corporation or a
subsidiary thereof, 25% of the Restricted Stock shares will be
vested; and (ii) the remaining Restricted Stock will become vested
at the rate of 6.25% of the total Restricted Stock shares awarded
every three months that elapse after the first anniversary of the
date of award. The purchase price for shares of Restricted Stock
purchased under the Omnibus Plan is payable to the Corporation on
the date of purchase in United States dollars in cash or by check,
or such other legal consideration as is approved by the Plan
Committee, in its discretion.
The expiration date of each award of Restricted Stock is
established by the Plan Committee, up to a maximum of ten years
from the date of award. Awards of Restricted Stock are also
subject to termination upon the death, disability, retirement or
termination of employment of the holder of the award. See "THE
PLAN -- Expiration and Forfeiture of Rights."
Incentive Units. Under the Omnibus Plan, the Plan Committee
may grant to eligible participants awards of long term incentive
units, each equivalent in value to one share of the Corporation's
Common Stock, in each of the years 1994 through 2002 ("Incentive
Units"). Except as otherwise provided, Incentive Units so awarded
may be distributed to the award recipient only after the end of a
performance period of two or more years, as determined by the Plan
Committee, beginning with the year in which the awards are
granted.
8
<PAGE>
The percentage of the Incentive Units awarded that are to be
distributed depends on the levels of financial and other
performance achieved by the Corporation during the performance
period. The Plan Committee may adopt one or more performance
categories in addition to, or in substitution for, a performance
category or may eliminate all performance categories other than
financial performance. All performance categories other than
financial performance may not be applied in the aggregate as a
factor of more than one against financial performance.
As soon as practicable after each performance period, the
percentage of Incentive Units awarded that are to be distributed,
based on the levels of performance achieved, are determined and
distributed to the recipients of such awards in the form of a
combination of shares of Common Stock and cash consisting of a
number of shares equal to 60% of the Incentive Units to be
distributed and cash equal in value to the remaining 40% of those
Incentive Units. Incentive Units awarded, but which the
recipients are not entitled to receive, are cancelled. The
Corporation will deduct from any distribution or payment in cash
any federal or state taxes applicable to the compensation income
arising from the distribution, and participants receiving shares
of Common Stock with respect to Incentive Units may be required to
pay to the Corporation the amount of any related income tax
liability, or the number of shares of Common Stock distributed may
be reduced by a number of shares the Fair Market Value of which is
equivalent to the amount of such tax liability. Incentive Units
awarded for any performance period are also subject to
termination, reduction or cancellation upon the death, disability,
retirement or termination of employment of the recipient or upon
demotion to a lower job grade classification prior to the end of
the performance period. See "THE PLAN -- Expiration and
Forfeiture of Rights."
An amount equal to the dividend payable on one share of the
Corporation's Common Stock (a "dividend equivalent credit") will
be determined and credited on each dividend payment date to each
Incentive Unit recipient's account under the Omnibus Plan. Such
amount will then be converted within the account to an additional
number of Incentive Units equal to the number of shares of Common
Stock which could be purchased at the last-transaction price of
the Common Stock on the Nasdaq on the dividend payment date with
the amount credited to the recipient's account.
No dividend equivalent credits or distribution of Incentive
Units will be credited or made if, at the time of crediting or
distribution, (i) the Corporation has not declared and paid a cash
dividend on the Corporation's Common Stock during the then current
quarter, (ii) there exists any default in payment of dividends on
any outstanding shares of capital stock, (iii) the rate of
dividends on the Common Stock is lower than at the time the
Incentive Units to which the dividend equivalent credits pertain
were awarded, (iv) the estimated consolidated net income for the
Corporation for the twelve months preceding the month of crediting
or distribution is less than the sum of dividend equivalent
credits to be credited and the Incentive Units to be distributed,
plus all dividends applicable to such period on an accrual basis,
either paid, declared or accrued at the most recently paid rate,
on all outstanding Common Stock, or (v) such crediting of dividend
equivalent credits or distribution of Incentive Units would result
in default under any agreement by which the Corporation is bound.
9
<PAGE>
If an extraordinary event occurs during a performance period
which significantly alters the basis upon which the performance
levels were established, the Plan Committee may make adjustments
which it deems appropriate in the performance levels. Such events
may include changes in accounting practices, tax, financial
institution laws or regulations or other laws or regulations,
economic changes not in the ordinary course of business cycles, or
compliance with judicial decrees or other legal requirements.
Stock Appreciation Rights. The Omnibus Plan provides that
the Plan Committee may award Rights to receive cash based upon
increases in the market price of Common Stock over the last
transaction price of the Common Stock on the Nasdaq ("base price")
on the date of the award (a "SAR"). The expiration date of a SAR
may be no more than ten years from the date of award.
The Plan Committee, in its discretion, may establish that
the base price of a SAR will be adjusted, upward or downward, on a
quarterly basis, based on the market performance of the
Corporation's Common Stock in comparison with one or more Indices
(as defined in the discussion concerning Options above). Each SAR
awarded by the Plan Committee may be exercisable immediately or
may become vested or such period or periods as the Plan Committee
may establish, which periods may be accelerated or shortened in
the Plan Committee's discretion.
Each SAR awarded will terminate upon the expiration date
established by the Plan Committee or the earlier termination of
the employment of the SAR recipient by reason of Death,
Disability, Retirement or Just Cause Termination. See "THE PLAN -
- - Expiration and Forfeiture of Rights."
Expiration and Forfeiture of Rights
Options. Each Option granted under the Omnibus Plan will
expire on such date as may be determined by the Plan Committee and
stated in the applicable Option Agreement, which expiration date
may not be later than ten years after the date the Option is
granted. In the case of any ISO granted to a 10% Shareholder, the
expiration date may not be later than five years after the date
the Option is granted. To the extent not previously exercised,
each Option granted will terminate upon the expiration date
established by the Plan Committee or upon the earlier of (i) 90
days after the holder of the Option ceases to be an employee of
the Corporation or a subsidiary thereof for any reason other than
the holder's Death, Disability, Retirement or Just Cause
Termination, (ii) twelve months after the holder ceases to be an
employee by reason of Death, Disability or Retirement, and (iii)
immediately upon termination of employment of the participant by
reason of a Just Cause Termination; provided, however, the Plan
Committee may require ISOs to be exercised with 90 days of Death,
Disability or Retirement in order to comply with certain Code
provisions.
Under the provisions of the Omnibus Plan, "Death" is defined
as the date and time of death of an Eligible Employee who has
received Rights as established by the relevant death certificate.
"Disability" is defined as the date on which an Eligible Employee
who has received Rights becomes totally and permanently disabled
as determined (i) by the Corporation's disability insurance
carrier
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(if the Eligible Employee is covered by a disability
policy owned by the Corporation) or by the Eligible Employee's
disability insurance carrier (if the Eligible Employee is not
covered by a disability policy owned by the Corporation), (ii)
under federal Social Security laws and regulations, or (iii) by a
physician acceptable to the Company. "Retirement" is defined as
(i) the termination of an Eligible Employee's employment under
conditions that would constitute "normal retirement" or "early
retirement" under any tax qualified retirement plan maintained by
the Corporation or any subsidiary thereof, or (ii) termination of
employment after attaining age 65. "Just Cause Termination" is
defined as any termination of the employment of an Eligible
Employee by the Corporation or one of its subsidiaries in
connection with a good faith determination by the Board of
Directors of the Corporation or subsidiary, as applicable, that
the Eligible Employee has engaged in any acts involving dishonesty
or moral turpitude or in any acts that materially and adversely
affect the business, affairs or reputation of the Corporation or
the subsidiary.
Restricted Stock. Each Right to acquire Restricted Stock
awarded under the Plan will expire on such date as may be
determined by the Plan Committee and stated in the applicable
Restricted Stock Purchase Agreement, which expiration date may not
be later than ten years after the date the grant of the Right to
acquire Restricted Stock is made. To the extent not previously
exercised, each Right to acquire Restricted Stock will terminate
upon the expiration date established by the Plan Committee or upon
the earlier of (i) 90 days after the holder of the Right ceases to
be an employee of the Corporation or a subsidiary for any reason
other than Death, Disability, Retirement or Just Cause
Termination, (ii) twelve months after the holder ceases to be an
employee of the Corporation by reason of Death, Disability or
Retirement, and (iii) immediately upon termination of employment
of the participant by reason of a Just Cause Termination.
Incentive Units. Incentive Units granted to a participant
under the Omnibus Plan will be distributed to the participant only
after the end of a performance period of two or more years, and
only if certain minimum levels of financial performance and other
performance objectives established by the Plan Committee are
achieved during the performance period. If the required minimum
performance objectives are not achieved, the Units awarded will
not be distributed to the participant but, instead, will be
cancelled and forfeited. Units awarded under the Omnibus Plan
will also be immediately forfeited and cancelled in the event a
participant ceases to be an Eligible Employee prior to the end of
any performance period other than by reason of Death, Disability
or Retirement. Units awarded to a participant may also be reduced
or eliminated in the event the participant is demoted to a lower
job grade classification prior to the end of the applicable
performance period. In the case of Death or Disability of a
participant prior to the end of any performance period, the number
of Units awarded for such period will be reduced pro rata based on
the number of months remaining in the performance period. In the
case of Retirement of a participant prior to the end of any
performance period, the number of Units awarded for such period
and not yet distributed will be prorated to the end of the year in
which Retirement occurs.
Stock Appreciation Rights. SARs granted under the Omnibus
Plan will expire on such date as may be determined by the Plan
Committee and stated in the applicable SAR Agreement, which
expiration date may not be later than ten years after the date the
SAR is granted. To the extent not
11
<PAGE>
previously exercised, each SAR will terminate upon the earlier of
(i) 90 days after the SAR recipient ceases to be an employee of the
corporation for any reason other than Death, Disability, Retirement
or a Just Cause Termination; (ii) twelve months after the SAR
recipient ceases to be an employee of the Corporation by reason of
Death, Disability or Retirement, or (iii) immediately upon termination
of employment of the recipient by reason of a Just Cause Termination.
Amendment and Termination
The Omnibus Plan will terminate on April 27, 2004. Under
its provisions, the Omnibus Plan may be amended, suspended or
discontinued by the Board of Directors at any time and from time
to time, subject to the following limitations:
(1) Any action by the Board that would materially increase
the maximum number of shares of Common Stock issuable pursuant to
the Omnibus Plan (other than proportionate adjustments to reflect
any increase, decrease or other change in the shares of Common
Stock outstanding as a result of a stock split, stock dividend,
recapitalization, merger, reclassification, or other similar
transaction), materially increase the benefits accruing to
participating employees or materially modify eligibility
requirements for participation in the Omnibus Plan will require
approval by the shareholders of the Corporation;
(2) No action of the Board may cause Options granted under
the Omnibus Plan that are ISOs not to comply with Section 422 of
the Code unless the Board specifically declares such action to be
made for that purpose; and
(3) Any action by the Board that would alter or impair any
Right previously granted to a participant under the Omnibus Plan
requires the consent of the applicable participant.
Restrictions on Transfer or Resale
The Omnibus Plan contains certain restrictions limiting the
ability of participants to Transfer (defined to include any sale,
assignment, transfer, conveyance, pledge, hypothecation,
encumbrance, loan, gift, attachment or similar transfer, including
transfers as a result of a qualified domestic relations order,
property settlement, bankruptcy or otherwise) shares of Common
Stock or other Rights awarded pursuant to the Omnibus Plan. In
addition, persons deemed to be "affiliates" of the Corporation
within the meaning of the Securities Act are subject to certain
additional restrictions limiting resale of shares of Common Stock
acquired by such affiliates under the Omnibus Plan.
The following is a brief summary of the various restrictions
on Transfer of the Rights acquired under the Omnibus Plan and the
shares of Common Stock issued pursuant thereto. Such summary does
not purport to be comprehensive or definitive, and is qualified in
its entirety by reference to the Omnibus Plan, a copy of which is
filed as an exhibit to the Registration Statement.
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<PAGE>
Options. Options granted pursuant to the Omnibus Plan may
not be Transferred except by will or the laws of descent and
distribution. During the lifetime of the optionee to whom Options
are granted under the Omnibus Plan, the Options may be exercised
only by such optionee.
Restricted Stock. Rights to acquire Restricted Stock may
not be Transferred under any circumstance. Shares of Restricted
Stock acquired under the Omnibus Plan may be Transferred only in
accordance with the applicable restrictions described under
"Common Stock" below.
Incentive Units. Incentive Units granted under the Omnibus
Plan may not be Transferred by a recipient other than distribution
to the recipient's estate or to certain designated beneficiaries
in the case of death of the recipient. During the lifetime of the
recipient, cash and stock distributed with respect to Incentive
Units may be received only by the recipient to whom such Incentive
Units were awarded.
Stock Appreciation Rights. SARs granted under the Omnibus
Plan may not be Transferred by a recipient other than distribution
to the recipient's estate or to certain designated beneficiaries
in the case of death of the recipient. During the lifetime of a
recipient, SARs may be exercised only by the recipient to whom
they were granted.
Common Stock. The Omnibus Plan is intended to encourage
ownership of Common Stock and related rights by certain designated
employees of the Corporation and the Corporation hopes such
employees who acquire Common Stock under the Omnibus Plan will
retain such Common Stock for investment. An employee who is not
an "affiliate" of the Company may, however, sell shares of Common
Stock that is not Restricted Stock at any time, and may sell
shares of Restricted Stock at any time after such shares become
vested pursuant to the terms of the Omnibus Plan, subject to the
following limitations:
(1) No shares of Common Stock obtained pursuant to an
Option may be transferred to sold until at least six (6)
months and one (1) day shall have elapsed since the date
such Option was granted.
(2) Any Transfer of Restricted Stock that would
otherwise be permitted under the terms of the Omnibus Plan
is prohibited unless the transferee executes such documents
as the Corporation may reasonably require to ensure the
Corporation's rights under the applicable Restricted Stock
Purchase Agreement and the Omnibus Plan are adequately
protected which may include, without limitation, an
agreement by the transferee to be bound by all applicable
terms of the Omnibus Plan and of the applicable Restricted
Stock Purchase Agreement.
(3) To the extent requested by the Corporation and
any underwriter of securities of the Corporation in
connection with a firm commitment underwriting, no
participant holding shares of Restricted Stock may Transfer
any such shares not included in the underwriting (or not
previously registered under the Securities Act) during the
120 day period following the
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<PAGE>
effective date of the registration statement filed with
the SEC under the Securities Act in connection with such
offering.
(4) Shares of Common Stock distributed with respect
to Incentive Units shall be subject to such restrictions and
conditions on disposition as counsel to the Corporation
shall determine to be desirable or necessary under
applicable law.
This Prospectus will not be available for reoffers or
resales of shares of Common Stock acquired by persons deemed to be
"affiliates" of the Corporation within the meaning of the
Securities Act. Such "affiliates" may accomplish reoffers or
resales of such shares of Common Stock pursuant to (i) another
appropriate prospectus contained in an effective registration
statement under the Securities Act, (ii) an appropriate exemption
under the Securities Act or (iii) Rule 144 of the General Rules
and Regulations promulgated under the Securities Act.
Acquisitions of shares of Common Stock and dispositions of shares
of Common Stock by certain officers or any director of the
Corporation within any six-month period may give rise to the right
of the Corporation to recapture any profit from such transaction
pursuant to Section 16(b) of the Exchange Act.
Outstanding Options
Options for an aggregate of 314,055 shares of Common Stock
are outstanding under the Prior Plans as follows: 34,156 shares
at an exercise price of $3.56 per share expiring on March 17,
1998; 16,875 shares at an exercise price of $4.08 per share
expiring on April 1, 1999; 8,437 shares at an exercise price of
$4.37 per share expiring on February 1, 1999; 54,000 shares at an
exercise price of $4.22 per share expiring on October 23, 2000;
7,875 shares at an exercise price of $5.78 per share expiring on
February 12, 2000; 97,875 shares at an exercise price of $6.67 per
share expiring on July 18, 2001; 87,750 shares at an exercise
price of $7.11 per share expiring on August 1, 1999; and 7,087
shares at an exercise price of $7.67 per share expiring on October
22, 1996. The options outstanding under the Prior Plans may be
exercised, in whole or in part, at any time and from time to time,
prior to the indicated expiration dates, subject to the terms of
the applicable plan.
Options for an aggregate of 71,000 shares of Common Stock
are outstanding under the Omnibus Plan as follows: 67,000 shares
at an exercise price of $13.625 per share expiring on January 27,
2004 and 4,000 shares at an exercise price of $15.375 per share
expiring on October 20, 2004. Subject to the terms and conditions
set forth in the Omnibus Plan and the applicable Option
Agreements, the Options expiring on April 28, 2004 may be
exercised in four equal annual installments beginning on April 28,
1996 and ending April 28, 1999, and all such Options must be
exercised, if at all, on or before January 27, 2004; and the
Options expiring on October 20, 2004 may be exercised in four
equal annual installments beginning on October 21, 1995 and ending
October 21, 1998, and all such Options must be exercised, if at
all, on or before October 20, 2004.
14
<PAGE>
Federal Income Tax Consequences
THE FOLLOWING IS A SUMMARY OF THE FEDERAL INCOME TAX
CONSEQUENCES OF THE RECEIPT AND EXERCISE OF RIGHTS GRANTED
PURSUANT TO THE OMNIBUS PLAN IN ACCORDANCE WITH PRESENT FEDERAL
TAX LAWS AND REGULATIONS IN EFFECT AS OF THE DATE HEREOF. IT DOES
NOT INCLUDE CONSEQUENCES OF STATE, LOCAL OR OTHER TAX LAW, NOR
DOES IT ADDRESS SPECIAL CONSEQUENCES TO PARTICIPANTS UNDER THE
OMNIBUS PLAN HAVING SPECIAL SITUATIONS, INCLUDING WITHOUT
LIMITATION THE APPLICABILITY OF THE ALTERNATIVE MINIMUM TAX.
ACCORDINGLY, EACH PARTICIPANT IS ENCOURAGED TO CONSULT HIS OR HER
TAX ADVISOR WITH RESPECT TO OTHER TAX CONSEQUENCES OF THE RECEIPT
AND EXERCISE OF RIGHTS UNDER THE OMNIBUS PLAN.
Based on the present provisions of the Code, and regulations
promulgated thereunder (the "Treasury Regulations"), the federal
income tax consequences of Rights awarded under the Omnibus Plan
and the subsequent disposition of Common Stock acquired thereby
will be as summarized below. The Omnibus Plan is not subject to
the qualification requirements of Section 401(a) of the Code.
NSOs and Restricted Stock. Under present Treasury
Regulations holding that an option does not have a readily
ascertainable fair market value for purposes of Section 83 of the
Code unless it is freely transferable, immediately exercisable in
full, and meets certain other conditions, the holder of an NSO
will not realize taxable income at the time the NSO is granted.
In general, an employee exercising an NSO will recognize
compensation income under Code Section 83 equal to the amount by
which the fair market value of the Common Stock received on the
date of exercise exceeds the sum of the exercise price and any
amount paid for the NSO. If the employee elects to pay the NSO
exercise price in whole or in part with Common Stock, the employee
generally will not recognize any gain or loss on the Common Stock
surrendered in payment of the exercise price.
The Corporation generally will not recognize any income or
be entitled to claim any deduction upon the grant of an NSO. At
the time the employee is required to recognize compensation income
upon the exercise of the NSO, the Corporation generally will be
entitled to claim a deduction in an amount equal to such
compensation income.
The Corporation expects that awards of Restricted Stock
generally will be treated for federal income tax purposes in a
manner similar to NSOs, since the employee is in effect being
given an option to acquire Common Stock in exchange for payment of
a purchase price.
ISOs. The holder of an ISO generally is not taxed on either
the grant or exercise of an ISO for regular federal income tax
purposes. However, the employee generally must include in his or
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<PAGE>
her federal alternative minimum tax income any excess (the
"Bargain Element") of the acquired Common Stock's fair market
value at time of exercise over the exercise price paid by the
employee. Furthermore, if the employee sells, exchanges, gifts or
otherwise disposes of (other than in certain types of
transactions) such stock either within two years after the ISO was
granted or within one year after the ISO was exercised (an "Early
Disposition"), the employee generally must recognize the Bargain
Element as compensation income for regular federal income tax
purposes. Any gain realized on the disposition in excess of the
Bargain Element is subject to recognition under the usual rules
applying in dispositions of property. If a taxable sale or
exchange is made after such holding periods are satisfied, the
difference between the exercise price and the amount realized upon
disposition of the Common Stock typically will constitute taxable
long-term capital gain or loss.
If an employee exercises an ISO and delivers shares of
Common Stock as payment for part or all of the exercise price of
the stock purchased ("Payment Stock"), no gain or loss generally
will be recognized with respect to the Payment Stock; provided,
however, if the Payment Stock was acquired pursuant to the
exercise of an ISO, the employee will be required to recognize as
compensation income the Bargain Element on the Payment Stock as an
Early Disposition if the exchange for the new shares occurs during
either of the holding periods for the Payment Stock.
The Corporation generally will not recognize gain or loss or
be entitled to a deduction upon either the grant or the employee's
exercise of an ISO. However, if there is an Early Disposition,
the Corporation generally will be entitled to deduct the Bargain
Element as compensation paid the employee.
Units. The Corporation expects that employees generally
will not be taxed on the award of Units. Instead, any cash and
the then fair market value of any Common Stock received by the
employee upon the distribution of a Unit generally will be taxable
to the employee as compensation income upon such distribution. At
that time, the Corporation generally will be entitled to claim a
deduction in an amount equal to the compensation income.
SARs. The Corporation expects that employees generally will
not be taxed on the award (or if the SAR is not immediately
exercisable, the vesting) of a SAR, but instead will be taxed on
the cash received on exercise of the SAR as compensation income.
At that time, the Corporation generally will be entitled to claim
a deduction in an amount equal to the compensation income.
Postponement of Taxation in Certain Cases. As discussed
above, upon receipt of Common Stock pursuant to the exercise of an
NSO, the purchase of Restricted Stock, or the distribution of a
Unit, an employee generally must recognize as compensation income
the amount, if any, by which the then fair market value of the
Common Stock thereby received exceeds any amount paid by the
employee for the Common Stock (plus, in the case of an NSO, any
amount paid for the grant of an NSO).
If the Common Stock received, however, is subject to a
substantial risk of forfeiture to which any transferee of the
Common Stock from the employee would be subject, taxation on the
Common
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<PAGE>
Stock (including the valuation of the Common Stock used to
measure the taxation) generally will be deferred until the risk
lapses or a transferee may take free of the risk, unless the
employee elects under Section 83(b) of the Code not to defer
taxation.
In general, a substantial risk of forfeiture will exist if
the employee's rights in the Common Stock are conditioned upon his
future performance of substantial services. In addition, if a
sale of the Common Stock received would subject the employee to
potential liability under Section 16(b) of the 1934 Act, then the
employee is deemed subject to a substantial risk of forfeiture to
which any transferee would take subject. Section 16(b) generally
provides that a director, officer, or more than 10% owner of a
corporation's stock, may be required to disgorge any profit deemed
made whenever he or she engages in both a purchase transaction and
a sale transaction in any six-month period. As applied for
federal income tax purposes, this generally will mean that
taxation of Common Stock received by an employee who is also a
director, executive officer, or 10% shareholder of the Corporation
would be deferred for six months after receipt of the Common
Stock, unless the employee elects under Code Section 83(b) not to
defer taxation.
If an employee's taxation is deferred by the presence of a
substantial risk of forfeiture, the Corporation's deduction
generally will also be deferred.
Limitations on Corporation Deduction. The ability of the
Corporation to deduct stock-based compensation payable under the
Omnibus Plan and/or other compensation generally will be
potentially subject to various limitations, including (i) in the
case of property other than cash, the Corporation's timely
withholding of federal income taxes on the compensation, (ii) the
limitations under Code Section 162 that the compensation be
reasonable in amount, (iii) the new $1,000,000 annual limit in
Code Section 162(m) on the amount of compensation that may be
deducted by publicly-held corporations in the case of certain
employees, and (iv) the Code Section 280G limitations on deducting
compensation that is contingent upon a change in control or the
sale of a substantial portion of corporate assets.
To the extent the compensation received by the employee is
attributable to services provided to one of the Corporation's
subsidiaries as distinguished from the Corporation itself, the
subsidiary, not the Corporation, will be entitled to claim any
deduction. If the property received by the employee is Common
Stock, the Corporation believes that it is likely that the
subsidiary will not be required to recognize any income on such
Common Stock.
The foregoing is only a brief summary of certain United
States federal income tax consequences of the Omnibus Plan.
Participants should consult their own tax advisors with respect to
other tax consequences of the receipt and exercise of Rights under
the Omnibus Plan.
17
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ANNUAL REPORT TO SHAREHOLDERS
The Corporation will furnish a copy of its latest Annual
Report to Shareholders to each person to whom the Corporation
sends or gives a copy of this Prospectus, unless such person
otherwise previously has received a copy of such Annual Report, in
which case the Corporation will promptly furnish without charge an
additional copy thereof at such person's written or oral request.
18
<PAGE>
Part II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P.,
Greensboro, North Carolina, serves as legal counsel to the
Corporation and has rendered opinions in connection with the
offering of the Common Stock pursuant to this Registration
Statement. Robert A. Singer, a partner in such firm, beneficially
owns or has sole or shared voting and/or investment power with
regard to 11,228 shares, and other members of the firm
beneficially own a total of 200 shares, of the Corporation's
Common Stock.
Item 6. Indemnification of Directors and Officers.
The Corporation's Restated Articles of Incorporation provide
that to the fullest extent permitted by the North Carolina
Business Corporation Act, Chapter 55 of the North Carolina General
Statutes, as amended (the "NCBCA"), no person who serves as a
director shall be personally liable to the Corporation or any of
its stockholders or otherwise for monetary damages for breach of
any duty as director. The Corporation's Bylaws state that, in
addition to all indemnification rights otherwise provided by law,
the Corporation shall indemnify its directors and those officers
of the Corporation who are also directors of the Corporation or
who are designated by the Board of Directors from time to time as
indemnified officers ("Indemnified Officers") against all
liabilities and obligations with respect to any judgment,
settlement, penalty or fine, and any legal, accounting, expert and
investigation fees and expenses, incurred in connection with any
action, suit or proceeding (including any action, suit or
proceeding brought by or on behalf of the Corporation) arising out
of their status as directors or officers, or their service at the
Corporation's request as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise or their
activities in any such capacity, other than liabilities,
obligations or expenses incurred on account of activities of such
person which at the time taken were known or believed by him or
her to be clearly in conflict with the best interests of the
Corporation. Directors and Indemnified Officers are also entitled
to indemnify for costs, expenses and attorneys' fees incurred in
connection with the enforcement of their rights to
indemnification. The Bylaws further authorize the Board of
Directors to adopt resolutions that may supplement, amplify or go
beyond the indemnification provisions set forth in the Bylaws so
long as such resolutions do not violate any provision of the
Corporation's Restated Articles of Incorporation or the NCBCA.
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Sections 55-8-50 through 55-8-58 of the NCBCA contain
provisions prescribing the extent to which directors and officers
shall or may be indemnified. Section 55-8-51 of the NCBCA permits
a corporation, with certain exceptions, to indemnify a present or
former director against liability if (i) the director conducted
himself in good faith, (ii) the director reasonably believed (x)
that the director's conduct in the director's official capacity
with the corporation was in its best interest and (y) in all other
cases the director's conduct was at least not opposed to the
corporation's best interest, and (iii) in the case of any criminal
proceeding, the director had no reasonable cause to believe the
director's conduct was unlawful. A corporation may not indemnify
a director in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the
corporation or in connection with a proceeding charging improper
personal benefit to the director. The above standard of conduct
is determined by the board of directors or a committee of
disinterested directors designated by the board, by special legal
counsel or by the shareholders of the corporation, as prescribed
in Section 55-8-55.
Sections 55-8-52 and 55-8-26 of the NCBCA require a
corporation to indemnify a director or officer against reasonable
expenses incurred in the defense of any proceeding to which the
director or officer was a party because such person is or was a
director or officer of the corporation when the director or
officer is wholly successful in his or her defense, unless the
articles of incorporation provide otherwise. Upon application,
the court may order indemnification of the director or officer if
the director or officer is adjudged fairly and reasonably entitled
to such indemnification under Section 55-8-54.
In addition to the indemnification provided for by statute,
Section 55-8-57 permits a corporation to provide for
indemnification of directors, officers, employees or agents, in
its articles of incorporation or bylaws or by contract or
resolution, against liability in various proceedings and to
purchase and maintain insurance policies on behalf of these
individuals.
THE FOREGOING IS ONLY A GENERAL SUMMARY OF CERTAIN ASPECTS
OF NORTH CAROLINA LAW DEALING WITH INDEMNIFICATION OF DIRECTORS
AND OFFICERS AND DOES NOT PURPORT TO BE COMPLETE. IT IS QUALIFIED
IN ITS ENTIRELY BY REFERENCE TO THE RELEVANT STATUTES, WHICH
CONTAIN DETAILED SPECIFIC PROVISIONS REGARDING THE CIRCUMSTANCES
UNDER WHICH AND THE PERSONS FOR WHOSE BENEFIT INDEMNIFICATIONS
SHALL OR MAY BE MADE.
Item 7. Exemption from Registration Claimed.
Not applicable.
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Item 8. Exhibits
The following exhibits are filed with or incorporated by
reference in this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit No. Description Reference
<S> <C> <C>
4.1 The Corporation's Restated Articles Incorporated by
of Incorporation and Bylaws reference
(incorporated by reference to
Exhibits 3(a) and 3(b) of the
Corporation's Form 10-K for the year
ended December 31, 1992 filed under
the Securities Exchange Act of 1934,
as amended
4.2 Specimen certificate for the Incorporated by
Corporation's Common Stock, no par reference
value (incorporated by reference to
Exhibit 4 of the Corporation's Form
10-K for the year ended December 31,
1992 filed under the Securities
Exchange Act of 1934, as amended
4.3 Security Capital Bancorp Omnibus Filed herewith
Stock Ownership and Long Term
Incentive Plan
5 Opinion of Brooks, Pierce, McLendon, Filed herewith
Humphrey & Leonard, L.L.P. as to
legality of securities being
registered
23 Consent of Brooks, Pierce, McLendon, Filed herewith
Humphrey & Leonard, L.L.P. (included
in Exhibit 5)
24 Powers of Attorney Filed herewith
</TABLE>
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) (a) 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;
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<PAGE>
(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 (1)(i) and (1)(ii) above
do not apply if the Registration Statement is on Form S-3 or
Form S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Corporation pursuant to
Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any
liability under the Securities Act, 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.
(c) To remove from registration by means of a post-
effective amendment any of the securities being registered
that remain unsold at the termination of the offering.
(2) That, for purposes of determining any liability under
the Securities Act, each filing of the Corporation's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
(3) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers,
and controlling persons of the Corporation pursuant to the
provisions discussed in Item 6 thereof, or otherwise, the
Corporation has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Corporation of expenses incurred or paid
by a director, officer or controlling person of the Corporation 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 hereby, the
Corporation 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
II-4
<PAGE>
by it is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
The Registrant. 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 Salisbury,
State of North Carolina, on the 21st day of February, 1995.
SECURITY CAPITAL BANCORP
By:
David B. Jordan, Vice-Chairman and
Chief Executive Officer
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
Chief Executive Officer February 21, 1995
David B. Jordan and Vice-Chairman of
the Board (Principal
Executive Officer)
Senior Vice President, February 21, 1995
Pressley A. Ridgill Treasurer and Chief Financial
Officer (Principal Financial
and Accounting Officer)
John M. Barnhardt )
Ralph A. Barnhardt )
Edward A. Brown )
Henry B. Gaye )
Dan L. Gray )
Lloyd G. Gurley )
William C. Kluttz, Jr. )
Ervin E. Lampert, Jr. )
William G. Loeblein )
F. Taft McCoy, Jr. ) Directors February 21, 1995
Harold Mowery )
J. G. Rutledge, III )
Carl M. Short, Jr. )
Miles F. Smith, Jr. )
W. Erwin Spainhour )
Fred J. Stanback, Jr. )
Jimmy K. Stegall )
Thomas A. Tate, Sr. )
F. William Wagoner )
James L. Williamson )
</TABLE>
By:
Pressley A. Ridgill, Attorney-in-Fact
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
<S> <C> <C>
4.1 The Corporation's Restated Articles of
Incorporation and Bylaws (incorporated by reference
to Exhibit 3(a) and 3(b) of the Corporation's
Registration Statement on Form 10-K for the year
ended December 31, 1992 filed under the
Securities Exchange Act of 1934, as amended)
4.2 Specimen certificate for the Corporation's Common
Stock, no par value (incorporated by reference to
Exhibit 4 of the Corporation's Form 10-K for the year
ended December 31, 1992 filed under the Securities
Exchange Act of 1934, as amended)
4.3 Security Capital Bancorp Omnibus Stock Ownership
and Long Term Incentive Plan
5 Opinion of Brooks, Pierce, McLendon, Humphrey
& Leonard, L.L.P. as to legality of securities
being registered
23 Consent of Brooks, Pierce, McLendon, Humphrey
& Leonard, L.L.P. (included in Exhibit 5)
24 Powers of Attorney
</TABLE>
******************************************************************************
APPENDIX
Security Capital Bancorp logo appears on Prospectus Cover.
SECURITY CAPITAL BANCORP
OMNIBUS STOCK OWNERSHIP AND
LONG TERM INCENTIVE PLAN
THIS IS THE OMNIBUS STOCK OWNERSHIP AND LONG TERM INCENTIVE PLAN
("Plan") of Security Capital Bancorp (the "Company"), a North Carolina
corporation with its principal office in Salisbury, Rowan County, North
Carolina, under which ISOs and Non-Qualified Options to acquire shares
of the Stock, Restricted Stock, SARs, and/or Units may be granted from
time to time to Eligible Employees of the Company and of any of its
subsidiaries (the "Subsidiaries"), subject to the following provisions:
ARTICLE I
DEFINITIONS
The following terms shall have the meanings set forth below.
Additional terms defined in this Plan shall have the meanings ascribed
to them when first used herein.
Board. The Board of Directors of Security Capital Bancorp.
Code. The Internal Revenue Code of 1986, as amended.
Committee. The Compensation and Personnel Committee of the Board.
Common Stock. The Common Stock, no par value per share, of the Company.
Death. The date and time of death of an Eligible Employee who has
received Rights as an Optionee, a Holder, a Unit Recipient and/or a SAR
Recipient as established by the relevant death certificate.
Disability. The date on which an Eligible Employee who has
received Rights becomes totally and permanently disabled as determined
(i) by the Company's disability insurance carrier (if the Eligible
Employee is covered by a Company-owned disability policy) or by his or
her disability insurance carrier (if the Eligible Employee is not
covered by a Company-owned disability policy), (ii) under federal Social
Security laws and regulations, or (iii) by a physician acceptable to the
Company.
Effective Date. The date as of which this Plan is effective shall
be the date it is adopted by the Board.
Eligible Employees. Those individuals who meet the following
eligibility requirements:
(i) Such individual must be a full time employee of the
Company or a Subsidiary. For this purpose, an individual shall be
considered to be an "employee" only if there exists between the
Company 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.
<PAGE>
(ii) Such individual falls within the job grade
classifications set forth in Schedule 1. Such job grade
classification may be amended, expanded, restricted or otherwise
modified by the Committee, subject to ratification of such action
by the Board.
(iii) If the Registration shall not have occurred, 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 receipt and/or exercise
of a Right.
(iv) Such individual, being otherwise an Eligible Employee
under the foregoing items, shall have been selected by the
Committee as a person to whom a Right or Rights shall be granted
under the Plan.
Fair Market Value. With respect to the Company's Common Stock, the
market price per share of such Common Stock determined by the Committee,
consistent with the requirements of Section 422 of the Code and to the
extent consistent therewith, as follows, as of the date specified in the
context within which such term is used: (i) if the Common Stock was
traded on a stock exchange on the date in question, then the Fair Market
Value will be equal to the closing price reported by the applicable
composite-transactions report for such date; (ii) if the Common Stock
was traded over-the-counter on the date in question and was classified
as a national market issue, then the Fair Market Value will be equal to
the last-transaction price quoted by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), National
Market System ("NMS"); (iii) if the Common Stock was traded
over-the-counter on the date in question but was not classified as a
national market issue, then the Fair Market Value will be equal to the
average of the last reported representative bid and asked prices quoted
by the NASDAQ for such date; and (iv) if none of the foregoing
provisions is applicable, then the Fair Market Value will be determined
by the Committee in good faith on such basis as it deems appropriate.
The Committee shall maintain a written record of its method of
determining Fair Market Value.
ISO. An "incentive stock option" as defined in Section 422 of the
Code.
Just Cause Termination. A termination by the Company or a
Subsidiary of an Eligible Employee's employment by the Company or the
Subsidiary in connection with the good faith determination of the Board
or the Board of Directors of the Subsidiary, as applicable, that the
Eligible Employee has engaged in any acts involving dishonesty or moral
turpitude or in any acts that materially and adversely affect the
business, affairs or reputation of the Company or the Subsidiary.
Non-Qualified Option. Any Option granted under Article III whether
designated by the Committee as a Non-Qualified Option or otherwise,
other than an Option designated by the Committee as an ISO, or any
Option so designated but which, for any reason, fails to qualify as an
ISO pursuant to Section 422 of the Code and the rules and regulations
thereunder.
Option Agreement. The agreement between the Company and an
Optionee with respect to Options granted to such Optionee, including
such terms and provisions as are necessary or appropriate under Article
III.
Options. ISOs and Non-Qualified Options are collectively referred
to herein as "Options;" provided, however, whenever reference is
specifically made only to ISOs or Non-Qualified Options, such reference
shall be deemed to be made to the exclusion of the other.
2
<PAGE>
Plan Pool. A total of 300,000 shares of authorized, but unissued,
Common Stock, as adjusted pursuant to Section 2.3(b), which shall be
available as Stock under this Plan.
Registration. The registration by the Company under the 1933 Act
and applicable state "Blue Sky" and securities laws of this Plan, the
offering of Rights under this Plan, the offering of Stock under this
Plan, and/or the Stock acquirable under this Plan.
Restricted Stock. The Stock which a Holder shall be entitled to
purchase when, as, in the amounts and for the Purchase Price(s)
described in Article IV.
Restricted Stock Purchase Agreement. The agreement between the
Company and a Holder with respect to Rights to purchase Restricted
Stock, including such terms and provisions as are necessary or
appropriate under Article IV.
Retirement. "Retirement" shall mean (i) the termination of an
Eligible Employee's employment under conditions which would constitute
"normal retirement" or "early retirement" under any tax qualified
retirement plan maintained by the Company or a Subsidiary, or (ii)
termination of employment after attaining age 65.
Rights. The rights to exercise, purchase or receive the Options,
Restricted Stock, Units and SARs described herein.
Rights Agreement. An Option Agreement, a Restricted Stock Purchase
Agreement, a Unit Agreement or a SAR Agreement.
SAR. The Right of a SAR Recipient to receive cash when, as and in
the amounts described in Article VI.
SAR Agreement. The agreement between the Company and a SAR
Recipient with respect to the SAR awarded to the SAR Recipient,
including such terms and conditions as are necessary or appropriate
under Article VI.
SEC. The Securities and Exchange Commission.
Stock. The shares of Common Stock in the Plan Pool available for
issuance pursuant to the valid exercise of a Right or on which the cash
value of a Right is to be based.
Tax Withholding Liability. All federal and state income taxes,
social security tax, and any other taxes applicable to the compensation
income arising from the transaction required by applicable law to be
withheld by the Company.
Transfer. The sale, assignment, transfer, conveyance, pledge,
hypothecation, encumbrance, loan, gift, attachment, levy upon,
assignment for the benefit of creditors, by operation of law (by will or
descent and distribution), transfer by a qualified domestic relations
order, a property settlement or maintenance agreement, transfer by
result of the bankruptcy laws or otherwise of a share of Stock or of a
Right.
3
<PAGE>
Units. The Right of a Unit Recipient to receive a combination of
cash and Stock when, and as in the amounts described in Article V.
Unit Agreement. The agreement between the Company and Unit
Recipient with respect to the award of Units to the Unit Recipient,
including such terms and conditions as are necessary or appropriate
under Article V.
1933 Act. The Securities Act of 1933, as amended.
1934 Act. The Securities Exchange Act of 1934, as amended.
ARTICLE II
GENERAL
Section 2.1. Purpose. The purposes of this Plan are to encourage
and motivate employees within specified job grade classifications to
contribute to the successful performance of the Company and its
Subsidiaries and the growth of the market value of the Company's Common
Stock; to achieve a unity of purpose between such employees and
shareholders by providing ownership opportunities, and, when viewed in
conjunction with benefit plans for members of the Board and the Boards
of Directors of certain Subsidiaries, to achieve a unity of purpose
between such employees and directors in the achievement of the Company's
primary long term performance objectives; and to retain such employees
by rewarding them with potentially tax-advantageous future compensation.
These objectives will be promoted through the granting of Rights to
designated Eligible Employees pursuant to the terms of this Plan.
Section 2.2. Administration.
(a) The Plan shall be administered by the Committee which
meets, and shall continue to meet, the standards of Rule
16b-3(c)(2)(i) promulgated by the SEC under the 1934 Act. Subject
to the provisions of SEC Rule 16b-3(c)(2)(i), the Committee may
designate any officers or employees of the Company or any
Subsidiary to assist in the administration of the Plan, to execute
documents on behalf of the Committee and to perform such other
ministerial duties as may be delegated to them by the Committee.
(b) Subject to the provisions of the Plan, the determinations
and 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 Rights granted hereunder and to
determine the terms and provisions (and amendments thereof) of the
Rights granted under the Plan (which need not be identical); (b) to
define the terms used in the Plan and in the Rights granted
hereunder; (c) to prescribe, amend and rescind the rules and
regulations relating to the Plan; (d) to determine the Eligible
Employees to whom and the time or times at which such Rights shall
be granted, the number of shares of Stock, as and when applicable,
to be subject to each Right, the exercise price or, other relevant
purchase price or value pertaining to a Right, and the
determination of leaves of absence which may be granted to Eligible
Employees without constituting a termination of their employment
for the purposes of the Plan; and (e) to make all other
determinations and interpretations necessary or advisable for the
administration of the Plan.
4
<PAGE>
(c) Notwithstanding the foregoing, or any other provision of
this Plan, the Committee will have no authority:
(i) to grant Rights to any of its members, whether or not
approved by the Board; or
(ii) to determine any matters, or exercise any discretion, to
the extent that the power to make such determinations or
to exercise such discretion would cause one or more
members of the Committee no longer to be "Disinterested
Directors" within the meaning of SEC Rule 16b-3.
(d) It shall be in the discretion of the Committee to grant
Options to purchase shares of Stock which qualify as ISOs under the
Code or which will be given tax treatment as Non-Qualified Options.
Any Options granted which fail to satisfy the requirements for ISOs
shall become Non- Qualified Options.
(e) The intent of the Company is to effect the Registration.
In such event, the Company shall make available to Eligible
Employees receiving Rights and/or shares of Stock in connection
therewith all disclosure documents required under such federal and
state laws. If such Registration shall not occur, the Committee
shall be responsible for supplying the recipient of a Right and/or
shares of Stock in connection therewith with such information about
the Company as is contemplated by the federal and state securities
laws in connection with exemptions from the registration
requirements of such laws, as well as providing the recipient of a
Right with the opportunity to ask questions and receive answers
concerning the Company and the terms and conditions of the Rights
granted under this Plan. In addition, if such Registration shall
not occur, the Committee shall be responsible for determining the
maximum number of Eligible Employees and the suitability of
particular persons to be Eligible Employees in order to comply with
applicable federal and state securities statutes and regulations
governing such exemptions.
(f) In determining the Eligible Employees to whom Rights may
be granted and the number of shares of Stock to be covered by each
Right, the Committee shall take into account the nature of the
services rendered by such Eligible Employees, their present and
potential contributions to the success of the Company and/or a
Subsidiary and such other factors as the Committee shall deem
relevant. An Eligible Employee who has been granted a Right under
this Plan may be granted an additional Right or Rights under this
Plan if the Committee shall so determine.
If, pursuant to the terms of this Plan, or otherwise in
connection with this Plan, it is necessary that the percentage of
stock ownership of an Eligible Employee be determined, the
ownership attribution provisions set forth in Section 424(d) of the
Code shall be controlling.
(g) The granting of Rights pursuant to this Plan is in the
exclusive discretion of the Committee, and until the Committee
acts, no individual shall have any rights under this Plan. The
terms of this Plan shall be interpreted in accordance with this
intent.
Section 2.3. Stock Available For Rights.
(a) Shares of the Stock shall be subject to, or underlying,
grants of Options, Restricted Stock, SARs and Units under this
Plan. The total number of shares of Stock for which, or with
5
<PAGE>
respect to which, Rights may be granted (including the number of
shares of Stock in respect of which SARs and Units may be granted)
under this Plan shall be those designated in the Plan Pool. In the
event that a Right granted under this Plan to any Eligible Employee
expires or is terminated unexercised as to any shares of Stock
covered thereby, such shares thereafter shall be deemed available
in the Plan Pool for the granting of Rights under this Plan;
provided, however, if the expiration or termination date of a Right
is beyond the term of existence of this Plan as described in
Section 7.3, then any shares of Stock covered by unexercised or
terminated Rights shall not reactivate the existence of this Plan
and therefore shall not be available for additional grants of
Rights under this Plan.
(b) In the event the outstanding shares of Common Stock are
increased, decreased, changed into or exchanged for a different
number or kind of securities as a result of a stock split, reverse
stock split, stock dividend, recapitalization, merger, share
exchange acquisition, combination or reclassification appropriate
proportionate adjustments will be made in: (i) the aggregate number
and/or kind of shares of Stock in the Plan Pool that may be issued
pursuant to the exercise of, or that are underlying, Rights granted
hereunder; (ii) the exercise or other purchase price or value
pertaining to, and the number and/or kind of shares of Stock called
for with respect to, or underlying, each outstanding Right granted
hereunder; and (iii) other rights and matters determined on a per
share basis under this Plan or any Rights Agreement. Any such
adjustments will be made only by the Committee, subject to
ratification by the Board, and when so made will be effective,
conclusive and binding for all purposes with respect to this Plan
and all Rights then outstanding. No such adjustments will be
required by reason of (i) the issuance or sale by the Company for
cash of additional shares of its Common Stock or securities
convertible into or exchangeable for shares of its Common Stock, or
(ii) the issuance of shares of Common Stock in exchange for shares
of the capital stock of any corporation, financial institution or
other organization acquired by the Company or any Subsidiary in
connection therewith.
(c) The grant of a Right pursuant to this Plan shall not
affect in any way the right or power of the Company to make
adjustments, reclassification, 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.
(d) No fractional shares of Stock shall be issued under this
Plan for any adjustment under Section 2.3(b).
Section 2.4. Severable Provisions. The Company intends that the
provisions of each of Articles III, IV, V and VI, in each case together
with Articles I, II and VII, shall each be deemed to be effective on an
independent basis, and that if one or more of such Articles, or the
operative provisions thereof, shall be deemed invalid, void or voidable,
the remainder of such Articles shall continue in full force and effect.
6
<PAGE>
ARTICLE III
OPTIONS
Section 3.1. Grant of Options.
(a) The Company may grant Options to Eligible Employees as
provided in this Article III. Options will be deemed granted
pursuant to this Article III only upon (i) authorization by the
Committee, and (ii) the execution and delivery of an Option
Agreement by the Eligible Employee optionee (the "Optionee") and a
duly authorized officer of the Company. Options will not be deemed
granted hereunder merely upon authorization of such grant by the
Committee. The aggregate number of shares of Stock potentially
acquirable under all Options granted shall not exceed the total
number of shares of Stock in the Plan Pool, less all shares of
Stock potentially acquired under, or underlying, all other Rights
outstanding under this Plan.
(b) The Committee shall designate Options at the time a grant
is authorized as either ISOs or Non-Qualified Options. The
aggregate Fair Market Value (determined as of the date an ISO is
granted) of the shares of Stock as to which an ISO may first become
exercisable by an Optionee in a particular calendar year (pursuant
to Article III and all other plans of the Company and/or its
Subsidiaries) may not exceed $100,000 (the "$100,000 Limitation").
If an Optionee is granted Options in excess of the $100,000
Limitation, or if such Options otherwise become exercisable with
respect to the number of shares of Stock which would exceed the
$100,000 Limitation, such excess Options shall be Non-Qualified
Options.
Section 3.2. Exercise Price.
(a) The initial exercise price of each Option granted under
this Plan (the "Exercise Price") shall be not less than one hundred
percent (100%) of the Fair Market Value of the Common Stock on the
date of grant of the Option. In the case of ISOs granted to a
shareholder who owns capital stock of the Company possessing more
than ten percent (10%) of the total combined voting power of all
classes of the capital stock of the Company (a "10% Shareholder"),
the Exercise Price of each Option granted under the Plan to such
10% Shareholder shall not be less than one hundred and ten percent
(110%) of the Fair Market Value of the Common Stock on the date of
grant of the Option.
(b) In its discretion and subject to the provisions of
Section 3.2(a) (as to the establishment of the Exercise Price of an
Option on the date of grant), the Committee may establish that the
Exercise Price of an Option shall be adjusted, upward or downward,
on a quarterly basis, based upon the market value performance of
the Common Stock in comparison with the aggregate market value
performance of one or more indices composed of publicly-traded
financial institutions and financial institution holding companies
deemed by the Committee to be similar (in terms of asset size,
capitalization, trading volumes and other factors deemed relevant
by the Committee) to the Company an "Index" and the "Indices";
provided, however, that the Exercise Price of an ISO shall not be
adjustable if, under the Code, such adjustable Exercise Price would
disqualify the ISO as an ISO. The Committee may utilize Indices
published by third parties and/or may construct one or more Indices
meeting the characteristics described above. The Indices utilized
will be recalculated quarterly, including in such quarterly
recalculation such adjustments for stock splits, reverse stock
splits and stock dividends of the companies in the indices and of
the Company as are appropriate. Each such Index shall include no
fewer than
7
<PAGE>
fifteen (15) publicly-traded financial institutions and
financial institution holding companies. If more than one Index is
utilized by the Committee, it may give such weighting to each Index
utilized as the Committee may determine in its sole discretion,
consistent with the provisions of this Article III.
Section 3.3. Terms and Conditions of Options.
(a) All Options must be granted within ten (10) years of the
Effective Date.
(b) The Committee may grant ISOs and Non-Qualified Options,
either separately or jointly, to an Eligible Employee.
(c) Each grant of Options shall be evidenced by an Option
Agreement in form and substance satisfactory to the Committee in
its discretion, consistent with the provisions of this Article III.
(d) At the discretion of the Committee, an Optionee, as a
condition to the granting of an Option, must execute and deliver to
the Company a confidential information agreement approved by the
Committee.
(e) Nothing contained in Article III, any Option Agreement or
in any other agreement executed in connection with the granting of
an Option under this Article III will confer upon any Optionee any
right with respect to the continuation of his or her status as an
employee of, consultant or independent contractor to, or director
of the Company or any of its Subsidiaries.
(f) Except as otherwise provided herein, each Option
Agreement may specify the period or periods of time within which
each Option or portion thereof will first become exercisable (the
"Vesting Period") with respect to the total number of shares of
Stock acquirable thereunder. Such Vesting Periods will be fixed by
the Committee in its discretion, and may be accelerated or
shortened by the Committee in its discretion; provided, however,
that the Vesting Period for each ISO shall be at least two years
(2) from the date such Option was granted.
(g) Not less than one hundred (100) shares of Stock may be
purchased at any one time through the exercise of an Option unless
the number purchased is the total number at that time purchasable
under all Options granted to the Optionee.
(h) An Optionee shall have no rights as a shareholder of the
Company with respect to any shares of Stock covered by Options
granted to the Optionee until payment in full of the Exercise Price
by such Optionee 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 Sections 2.3(b) and 3.2(b).
(i) All shares of Stock obtained pursuant to an Option which
qualifies as an ISO 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 ISO or (ii) one (1) year after the issuance of such shares
pursuant to the exercise of the ISO. Such shares of Stock shall be
held by the Company or its designee. The Optionee who has
exercised the ISO shall have all rights of a shareholder,
including, but not limited, to
8
<PAGE>
the rights to vote, receive dividends and sell such shares. The sole
purpose of the escrow is to inform the Company of a disqualifying
disposition of the shares of Stock acquired within the meaning of
Section 422 of the Code, and it shall be administered solely for this
purpose.
(j) Additionally and notwithstanding any other provisions of
this Article III, no shares of Stock obtained pursuant to an Option
may be Transferred until at least six (6) months and one (1) day
shall have elapsed since the date such Option was granted.
Section 3.4. Exercise of Options.
(a) An Optionee must be an Eligible Employee at all times
from the date of grant until the exercise of the Options granted,
except as provided in Section 3.5(b).
(b) An Option may be exercised to the extent exercisable (i)
by giving written notice of exercise to the Company, specifying the
number of full shares of Stock to be purchased and, if applicable,
accompanied by full payment of the Exercise Price thereof and the
amount of the Tax Withholding Liability pursuant to Section 3.4(c)
below; and (ii) by giving assurances satisfactory to the Company
that the shares of Stock to be purchased upon such exercise are
being purchased for investment and not with a view to resale in
connection with any distribution of such shares in violation of the
1933 Act; provided, however, that in the event the prior occurrence
of the Registration or in the event resale of such Stock without
such Registration would otherwise be permissible, this second
condition will be inoperative if, in the opinion of counsel for the
Company, such condition is not required under the 1933 Act or any
other applicable law, regulation or rule of any governmental
agency. All ISOs must be exercised sequentially in the order
granted.
(c) As a condition to the issuance of the shares of Stock
upon full or partial exercise of a Non-Qualified Option, the
Optionee will pay to the Company in cash, or in such other form as
the Committee may determine in its discretion, the amount of the
Company's Tax Withholding Liability required in connection with
such exercise.
(d) The Exercise Price of an Option shall be payable to the
Company either (i) in United States dollars, in cash or by check,
bank draft or money order payable to the order of the Company, or
(ii) at the discretion of the Committee, through the delivery of
outstanding shares of the Common Stock owned by the Optionee with a
Fair Market Value as of the date of delivery equal to the Exercise
Price, or (iii) at the discretion of the Committee by a combination
of (i) and (ii) above. No shares of Stock shall be delivered until
full payment has been made. Except as provided in Sections 2.3(b)
and 3.2(b), the Committee may not approve a reduction of the
Exercise Price of any such Option, or the cancellation of any such
Option and the regranting thereof to the same Optionee at a lower
Exercise Price, at a time when the Fair Market Value of the Common
Stock is lower than it was when such Option was granted.
Section 3.5. Term and Termination of Option.
(a) The Committee shall determine, and each Option Agreement
shall state, 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 was granted (the "Option Period"). In the event
an ISO is granted to a 10% Shareholder, the expiration date or
dates of each Option Period shall be not
9
<PAGE>
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 Period after such date was originally set; provided,
however, such expiration date may not exceed the maximum expiration date
described in this Section 3.5(a).
(b) To the extent not previously exercised, each Option will
terminate upon the expiration of the Option Period specified in the
Option Agreement; provided, however, that, subject to the
provisions of Section 3.5(a), each such Option will terminate upon
the earlier of: (i) ninety (90) days after the date that the
Optionee ceases to be an Eligible Employee for any reason, other
than by reason of Death, Disability, Retirement or a Just Cause
Termination; (ii) twelve (12) months after the date that the
Optionee ceases to be an Eligible Employee by reason of Death,
Disability or Retirement; or (iii) immediately as of the date that
the Optionee ceases to be an Eligible Participant by reason of a
Just Cause Termination. Any portions of Options not exercised
within the foregoing periods shall terminate.
Section 3.6. Restrictions On Transfer. An Option granted under
Article III 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.
Section 3.7. Stock Certificates. Certificates representing the
Stock issued pursuant to the exercise of Options will bear all legends
required by law and necessary to effectuate the provisions hereof. The
Company may place a "stop transfer" order against such shares of Stock
until all restrictions and conditions set forth in this Article III, the
applicable Option Agreement, and in the legends referred to in this
Section 3.7 have been complied with.
Section 3.8. Amendment and Discontinuance. The Board may amend,
suspend or discontinue the provisions of this Article III at any time or
from time to time; provided that no action of the Board will cause ISOs
granted under this Plan not to comply with Section 422 of the Code
unless the Board specifically declares such action to be made for that
purpose; and, provided, further, that no such action may, without the
approval of the shareholders of the Company, materially increase (other
than by reason of an adjustment pursuant to Section 2.3(b) hereof) the
maximum aggregate number of shares of Stock in the Plan Pool, materially
increase the benefits accruing to Eligible Employees or materially
modify eligibility requirements for participation under this Article
III. Moreover, no such action may alter or impair any Option previously
granted under this Article III without the consent of the applicable
Optionee.
Section 3.9. Compliance with Rule 16b-3. With respect to persons
subject to Section 16 of the 1934 Act, transactions under this Article
III are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the 1934 Act. To the extent any provision of
this Article III or action by the Board or the Committee fails so to
comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee.
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ARTICLE IV
RESTRICTED STOCK GRANTS
Section 4.1. Grants of Restricted Stock.
(a) The Company may grant Rights to acquire Restricted Stock
to Eligible Employees as provided in this Article IV. Rights to
acquire shares of Restricted Stock will be deemed granted only upon
(i) authorization by the Committee and (ii) the execution and
delivery of a Restricted Stock Purchase Agreement by the Eligible
Employee to whom such Restricted Stock is to be issued (the
"Holder") and a duly authorized officer of the Company. Rights to
acquire shares of Restricted Stock will not be deemed to have been
granted merely upon authorization by the Committee. The aggregate
number of shares of Restricted Stock potentially acquirable under
all Rights to acquire Restricted Stock shall not exceed the total
number of shares of Stock in the Plan Pool, less all shares of
Stock potentially acquirable under, or underlying, all other Rights
outstanding under this Plan.
(b) Each grant of a Right to acquire Restricted Stock
pursuant to this Article IV will be evidenced by a Restricted Stock
Purchase Agreement between the Company and the Holder in form and
substance satisfactory to the Committee in its sole discretion,
consistent with this Article IV. Each Restricted Stock Purchase
Agreement will specify the purchase price per share (the "Purchase
Price") with respect to the Restricted Stock to be issued to the
Holder thereunder, to be fixed by the Committee in its discretion.
The Purchase Price will be payable to the Company in United States
dollars in cash or by check or, such other legal consideration as
may be approved by the Committee, in its discretion.
(c) Without limiting the foregoing, each Restricted Stock
Purchase Agreement shall include the following terms and
conditions:
(i) At the discretion of the Committee, the Holder, as a
condition to such issuance, shall be required to execute and
deliver to the Company a confidential information agreement
approved by the Committee.
(ii) Nothing contained in this Article IV, any Restricted
Stock Purchase Agreement or in any other agreement executed in
connection with the issuance of Restricted Stock under this
Article IV will confer upon any Holder any right with respect
to the continuation of his or her status as an employee of,
consultant or independent contractor to, or director of, the
Company or any of its Subsidiaries.
(iii) Except as otherwise set forth in this Article IV, as of
the date of a grant of a Right to acquire Restricted Stock
(the "Grant Date"), all of the shares of Restricted Stock to
be issued pursuant to the Restricted Stock Purchase Agreement
(the "Total Award Shares") will be deemed Unvested (i.e., not
available for purchase by the Holder) and will become Vested
(i.e., available for purchase by the Holder) according to the
following schedule:
(A) Upon and after such first anniversary of the Grant
Date, twenty-five percent (25%) of the Total Award Shares
will have become fully Vested, subject to the Holder's
remaining an Eligible Employee.
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(B) The remaining Total Award Shares will become Vested
at a rate six and one- quarter percent (6.25%) of the
Total Award Shares at the end of every period of three
(3) months that elapses after such first anniversary of
the Grant Date, so that all of the Total Award Shares
will have become Vested, subject to the Holder's
remaining an Eligible Employee through such period, on
the fourth anniversary of such Grant Date.
Section 4.2. Restrictions on Transfer of Restricted Stock.
(a) Rights to acquire Restricted Stock may not be
Transferred, and shares of Restricted Stock acquired by a Holder
may be Transferred only in accordance with the specific limitations
on the Transfer of Restricted Stock imposed by applicable state or
federal securities laws or set forth below, and subject to certain
undertakings of the transferee set forth in Section 4.2(c). All
Transfers of Restricted Stock not meeting the conditions set forth
in this Section 4.2(a) are expressly prohibited.
(b) Any Transfer of Rights to acquire Restricted Stock and
any prohibited Transfer of Restricted Stock is void and of no
effect. Should such a Transfer purport to occur, the Company may
refuse to carry out the Transfer on its books, attempt to set aside
the Transfer, enforce any undertaking or right under this Section
4.2(b), and/or exercise any other legal or equitable remedy.
(c) Any Transfer of Restricted Stock that would otherwise be
permitted under the terms of this Plan is prohibited unless the
transferee executes such documents as the Company may reasonably
require to ensure the Company's rights under a Restricted Stock
Purchase Agreement and this Article IV are adequately protected
with respect to the Restricted Stock so Transferred. Such
documents may include, without limitation, an agreement by the
transferee to be bound by all of the terms of this Plan applicable
to Restricted Stock and of the applicable Restricted Stock Purchase
Agreement, as if the transferee were the original Holder of such
Restricted Stock.
(d) To facilitate the enforcement of the restrictions on
Transfer set forth in this Article IV, the Committee may, at its
discretion, require the Holder of shares of Restricted Stock to
deliver the certificate(s) for such shares with a stock power
executed in blank by the Holder and the Holder's spouse, to the
Secretary of the Company or his or her designee, and the Company
may hold said certificate(s) and stock power(s) in escrow and take
all such actions as are necessary to insure that all Transfers
and/or releases are made in accordance with the terms of this Plan.
The certificates may be held in escrow so long as the shares of
Restricted Stock whose ownership they evidence are subject to any
restriction on Transfer under this Article IV or under an
Restricted Stock Purchase Agreement. Each Holder acknowledges that
the Secretary of the Company (or his or her designee) is so
appointed as the escrow holder with the foregoing authorities as a
material inducement to the issuance of shares of Restricted Stock
under this Article IV, that the appointment is coupled with an
interest, and that it accordingly will be irrevocable. The escrow
holder will not be liable to any party to an Restricted Stock
Purchase Agreement (or to any other party) for any actions or
omissions unless the escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or
other document executed by any signature purported to be genuine.
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Section 4.3. Termination.
(a) The Committee shall determine, and each Restricted Stock
Purchase Agreement shall state, the expiration date or dates of
each grant of a Right to acquire Restricted Stock, but such
expiration date shall be not later than ten (10) years after the
date such grant of a Right to acquire Restricted Stock is made (the
"Restricted Stock Period"). The Committee, in its discretion, may
extend the expiration date or dates of a Restricted Stock Period
after such date was originally set; provided, however, such
expiration date may not exceed the maximum expiration date
described in this Section 4.3(a).
(b) To the extent not previously exercised, each grant of
Restricted Stock will terminate upon the expiration of the
Restricted Stock Period specified in the Restricted Stock Purchase
Agreement; provided, however, that, subject to Section 4.3(a), each
such grant of Restricted Stock will terminate upon the earlier of:
(i) ninety (90) days after the date that the Holder ceases to be an
Eligible Employee for any reason, other than by reason of Death,
Disability, Retirement or a Just Cause Termination; (ii) twelve
(12) months after the date that the Holder ceases to be an Eligible
Employee by reason of Death, Disability or Retirement; or (iii)
immediately as of the date that the Holder ceases to be an Eligible
Participant by reason of a Just Cause Termination. Any portions of
the grant of Restricted Stock to a Holder not exercised within the
foregoing periods shall terminate.
Section 4.4. Compliance with Law. Notwithstanding any other
provision of this Article IV, Restricted Stock may be issued pursuant to
this Article IV only after there has been compliance with all applicable
federal and state securities laws, and such issuance will be subject to
this overriding condition. The Company may include shares of Restricted
Stock in a Registration, but will not be required to register or qualify
Restricted Stock with the SEC or any state agency, except that the
Company will register with, or as required by local law, file for and
secure an exemption from such registration requirements from, the
applicable securities administrator and other officials of each
jurisdiction in which an Eligible Employee would be issued Restricted
Stock hereunder prior to such issuance.
Section 4.5. Stock Certificates. Certificates representing the
Restricted Stock issued pursuant to this Article IV will bear all
legends required by law and necessary to effectuate the provisions
hereof. The Company may place a "stop transfer" order against shares of
Restricted Stock until all restrictions and conditions set forth in this
Article IV, the applicable Restricted Stock Purchase Agreement and in
the legends referred to in this Section 4.5 have been complied with.
Section 4.6. Market Standoff. To the extent requested by the
Company and any underwriter of securities of the Company in connection
with a firm commitment underwriting, no Holder of any shares of
Restricted Stock will Transfer any such shares not included in such
underwriting, or not previously registered in a Registration, during the
one hundred twenty (120) day period following the effective date of the
registration statement filed with the SEC under the 1933 Act in
connection with such offering.
Section 4.7. Amendment and Discontinuance. The Board may amend,
suspend or discontinue this Article IV at any time or from time to time;
provided, that no such action of the Board shall alter or impair any
rights previously granted to Holders under this Article IV without the
consent of such affected Holders; and provided, further, that no such
action may, without the approval of the Company's shareholders,
materially increase (other than by reason of an adjustment pursuant to
Section 2.3(b) hereof)
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the maximum aggregate number of shares of Stock in the Plan Pool,
materially increase the benefits accruing to Eligible Employees under
this Article IV or materially modify the requirements as to eligibility
for participation under this Article IV. Moreover, no such action may
alter or impair any Right to acquire Restricted Stock previously granted
under this Article IV with the consent of the applicable Holder.
Section 4.8. Compliance with Rule 16b-3. With respect to persons
subject to Section 16 of the 1934 Act, transactions under this Article
IV are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the 1934 Act. To the extent any provision of
this Article IV or action by the Board or the Committee fails so to
comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee.
ARTICLE V
LONG-TERM INCENTIVE COMPENSATION UNITS
Section 5.1. Awards of Units.
(a) The Committee may grant awards of Units to Eligible
Employees as provided in this Article V. Units will be deemed
granted only upon (i) authorization by the Committee and (ii) the
execution and delivery of a Unit Agreement by the Eligible Employee
to whom Units are to be granted (a "Unit Recipient") and an
authorized officer of the Company. Units will not be deemed
granted merely upon authorization by the Committee. Units may be
granted in each of the years 1994 through 2002 in such amounts and
to such Unit Recipients as it may determine in its sole discretion
subject to the limitation in Section 5.2 below.
(b) Each grant of Units pursuant to this Article V will be
evidenced by a Unit Award Agreement between the Company and the
Unit Recipient in form and substance satisfactory to the Committee
in its sole discretion, consistent with this Article V.
(c) Except as otherwise provided herein, Units will be
distributed only after the end of a performance period of two or
more years ("Performance "Period") beginning with the year in which
such Units were awarded. The Performance Period shall be set by
the Committee for each year's awards.
(d) The percentage of the Units awarded under this Section
5.1 or credited pursuant to Section 5.5 that will be distributed to
Unit Recipients shall depend on the levels of financial performance
and other performance objectives achieved during each year of the
Performance Period; provided, however, that the Committee may adopt
one or more performance categories or eliminate all performance
categories other than financial performance. Financial performance
shall be based on the consolidated results of the Company and its
Subsidiaries prepared on the same basis as the financial statements
published for financial reporting purposes and determined in
accordance with Section 5.1(e) below. Other performance categories
adopted by the Committee shall be based on measurements of
performance as the Committee shall deem appropriate.
(e) Distributions of Units awarded will be based on the
Company's financial performance with results from other performance
categories applied as a factor, not exceeding one (1), against
financial results. The annual financial and other performance
results will be averaged over the
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Performance Period and translated into percentage factors according
to graduated criteria established by the Committee for the entire
Performance Period. The resulting percentage factors shall determine
the percentage of Units to be distributed.
No distributions of Units, based on financial performance and
other performance, shall be made if a minimum average percentage of
the applicable measurement of performance, to be established by the
Committee, is not achieved for the Performance Period. The
performance levels achieved for each Performance Period and
percentage of Units to be distributed shall be conclusively
determined by the Committee.
(f) The percentage of Units awarded which Unit Recipients
become entitled to receive based on the levels of performance
(including those Units credited under Section 5.5) will be
determined as soon as practicable after each Performance Period and
are called "Retained Units."
(g) As soon as practical after determination of the number of
Retained Units, such Retained Units shall be distributed in the
form of a combination of shares and cash consisting of a number of
shares of Stock equal to sixty percent (60%) of the number of
Retained Units and cash equal in value to forty percent (40%) of
the number of Retained Units, as determined under Section 5.7(e).
The Units awarded, but which Unit Recipients do not become entitled
to receive, shall be cancelled.
(h) Notwithstanding any other provision in this Article V,
the Committee, if it determines in its sole discretion that it is
necessary or advisable under the circumstances, may adopt rules
pursuant to which Eligible Employees by virtue of hire, or
promotion or upgrade to a higher job grade classification, or
special individual circumstances, may be granted the total award of
Units or any portion thereof, with respect to one or more
Performance Periods that began in prior years and at the time of
the awards have not yet been completed.
Section 5.2. Limitations. The aggregate number of shares of Stock
potentially distributable under all Units granted, including those Units
credited pursuant to Section 5.5, shall not exceed the total number of
shares of Stock in the Plan Pool, less all shares of Stock potentially
acquirable under, or underlying, all other Rights outstanding under this
Plan.
Section 5.3. Terms and Conditions.
(a) All awards of Units must be made within ten (10) years of
the Effective Date.
(b) The award of Units shall be evidenced by a Unit Award
Agreement in form and substance satisfactory to the Committee in
its discretion, consistent with the provisions of this Article V.
(c) At the discretion of the Committee, a Unit Recipient, as
a condition to the award of Units, must execute and deliver to the
Company a confidential information agreement approved by the
Committee.
(d) Nothing contained in this Article V, any Unit Award
Agreement or in any other agreement executed in connection with the
award of Units under this Article V will confer upon any Unit
Recipient any right with respect to the continuation of his or her
status as an employee
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<PAGE>
of, consultant or independent contractor to,
or director of, the Company or any of its Subsidiaries.
(e) A Unit Recipient shall have no rights as a shareholder of
the Company with respect to any Units until the distribution of
shares of Stock in connection therewith. No adjustment shall be
made in the number of Units 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
Sections 2.3(b) and 5.6.
Section 5.4. Special Distribution Rules.
(a) Except as otherwise provided in this Section 5.4, a Unit
Recipient must be an Eligible Employee from the date a Unit is
awarded to him or her continuously through and including the date
of distribution of such Unit.
(b) In case of the Death or Disability of a Unit Recipient
prior to the end of any Performance Period, whether before or after
any event set forth in Section 5.4(b) below, the number of Units
awarded to the Unit Recipient for such Performance Period shall be
reduced pro rata based on the number of months remaining in the
Performance Period after the month of Death or Disability. The
remaining Units, reduced in the discretion of the Committee to the
percentage indicated by the levels of performance achieved prior to
the date of Death or Disability, if any, shall be distributed
within a reasonable time after Death or Disability. All other
Units awarded to the Unit Recipient for such Performance Period
shall be cancelled.
(c) If a Unit Recipient enters into Retirement prior to the
end of any Performance Period, the Units awarded to such Unit
Recipient under this Article V, and not yet distributed, shall be
prorated to the end of the year in which such Retirement occurs and
distributed at the end of the Performance Period based upon the
Company's performance for such period.
(d) In case of the termination of the Unit Recipient's status
as an Eligible Employee prior to the end of any Performance Period
for any reason other than Death, Disability or Retirement, all
Units awarded to the Unit Recipient with respect to any such
Performance Period shall be immediately forfeited and cancelled.
(e) Upon a Unit Recipient's promotion to a higher job grade
classification, the Committee may award to the Unit Recipient the
total Units, or any portion thereof, which are associated with the
higher job grade classification for the current Performance Period.
Notwithstanding any other provision of the Plan, the Committee
may reduce or eliminate awards to a Unit Recipient who has been
demoted to a lower job grade classification, and where
circumstances warrant, may permit continued participation,
proration or early distribution, or a combination thereof, of
awards which would otherwise be cancelled.
Section 5.5. Dividend Equivalent Units. On each record date for
dividends on the Common Stock, an amount equal to the dividend payable
on one share of Common Stock will be determined and credited (the
"Dividend Equivalent Credit") on the payment date to each Unit
Recipient's account for each Unit which has been awarded to the Unit
Recipient and not distributed or cancelled. Such amount will be
converted within the account to an additional number of Units equal to
the number of shares of
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Common Stock that could be purchased at Fair Market Value on such dividend
payment date. These Units will be treated for purposes of this Article V
in the same manner as those Units granted pursuant to Section 5.1.
Section 5.6. Adjustments. In addition to the provisions of
Section 2.3(b), if an extraordinary change occurs during a Performance
Period which significantly alters the basis upon which the performance
levels were established under Section 5.1 for that Performance Period,
to avoid distortion in the operation of this Article V, but subject to
Section 5.2, the Committee may make adjustments in such performance
levels to preserve the incentive features of this Article V, whether
before or after the end of the Performance Period, to the extent it
deems appropriate in its sole discretion, which adjustments shall be
conclusive and binding upon all parties concerned. Such changes may
include, without limitation, adoption of, or changes in, accounting
practices, tax laws and regulatory or other laws or regulations;
economic changes not in the ordinary course of business cycles; or
compliance with judicial decrees or other legal authorities.
Section 5.7. Other Conditions.
(a) No person shall have any claim to be granted an award of
Units under this Article V and there is no obligation for
uniformity of treatment of Eligible Employees or Unit Recipients
under this Article IV.
(b) The Company shall have the right to deduct from any
distribution or payment in cash under this Article V, and the Unit
Recipient or other person receiving shares of Stock under this
Article V shall be required to pay to the Company, any Tax
Withholding Liability. The number of shares of Stock to be
distributed to any individual Unit Recipient may be reduced by the
number of shares of Stock, the Fair Market Value of which on the
Distribution Date (as defined in Section 5.7(d) below) is
equivalent to the cash necessary to pay any Tax Withholding
Liability, where the cash to be distributed is not sufficient to
pay such Tax Withholding Liability, or the Unit Recipient may
deliver to the Company cash sufficient to pay such Tax Withholding
Liability.
(c) Any distribution of shares of Stock under this Article V
may be delayed until the requirements of any applicable laws or
regulations, and any stock exchange or NASDAQ-NMS requirements, are
satisfied. The shares of Stock distributed under this Article V
shall be subject to such restrictions and conditions on disposition
as counsel for the Company shall determine to be desirable or
necessary under applicable law.
(d) For the purpose of distribution of Units in cash, the
value of a Unit shall be the Fair Market Value on the Distribution
Date. The "Distribution Date" shall be the first business day of
March 15th in the year of distribution, except that in the case of
special distributions the Distribution Date shall be the first
business day of the month in which the Committee determines the
distribution.
(e) Notwithstanding any other provision of this Article V, no
Dividend Equivalent Credits shall be made and no distributions of
Units shall be made if at the time a Dividend Equivalent Credit or
distribution would otherwise have been made:
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(i) The regular quarterly dividend on the Common Stock
has been omitted and not subsequently paid or there exists any
default in payment of dividends on any such outstanding shares
of capital stock of the Company;
(ii) The rate of dividends on the Common Stock is lower
than at the time the Units to which the Dividend Equivalent
Credit relates were awarded, adjusted for any change of the
type referred to in Section 2.3(b).
(iii) Estimated consolidated net income of the Company
for the twelve-month period preceding the month the Dividend
Equivalent Credit or distribution would otherwise have been
made is less than the sum of the amount of the Dividend
Equivalent Credits and Units eligible for distribution under
this Article V in that month plus all dividends applicable to
such period on an accrual basis, either paid, declared or
accrued at the most recently paid rate, on all outstanding
shares of Common Stock; or
(iv) The Dividend Equivalent Credit or distribution
would result in a default in any agreement by which the
Company is bound.
(f) In the event net income available under Section 5.7(e)
above for Dividend Equivalent Credits and awards eligible for
distribution under this Article V is sufficient to cover part but
not all of such amounts, the following order shall be applied in
making payments: (i) Dividend Equivalent Credits, (ii) Units
eligible for distribution under this Article V.
Section 5.8. Designation of Beneficiaries. A Unit Recipient may
designate a beneficiary or beneficiaries to receive all or part of the
Stock and/or cash to be distributed to the Unit Recipient under this
Article V in case of Death. A designation of beneficiary may be
replaced by a new designation or may be revoked by the Unit Recipient at
any time. A designation or revocation shall be on a form to be provided
for that purpose and shall be signed by the Unit Recipient and delivered
to the Company prior to the Unit Recipient's Death. In case of the Unit
Recipient's Death, the amounts to be distributed to the Unit Recipient
under this Article V with respect to which a designation of beneficiary
has been made (to the extent it is valid and enforceable under
applicable law) shall be distributed in accordance with this Article V
to the designated beneficiary or beneficiaries. The amount
distributable to a Unit Recipient upon Death and not subject to such a
designation shall be distributed to the Unit Recipient's estate. If
there shall be any question as to the legal right of any beneficiary to
receive a distribution under this Article V, the amount in question may
be paid to the estate of the Unit Recipient, in which event the Company
shall have no further liability to anyone with respect to such amount.
Section 5.9. Restrictions On Transfer. Units granted under
Article V may not be Transferred, except as provided in Section 5.8,
and, during the lifetime of the Unit Recipient to whom it was awarded,
cash and stock receivable with respect to Units may be received only by
such Unit Recipient.
Section 5.10. Amendment and Discontinuance. No award of Units may
be granted under this Article V after April 27, 2002. The Board may
amend, suspend or discontinue the provisions of this Article V at any
time or form time to time, provided, that no such action may, without
the approval of the shareholders of the Company, materially increase
(other than by reason of an adjustment pursuant to Section 2.3(b)
hereof) the maximum number of shares of Stock in the Plan Pool,
materially increase the benefits accruing to Eligible Employees under
this Article V or materially modify the eligibility requirements for
participation under this Article V.
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Section 5.11. Compliance with Rule 16b-3. With respect to persons
subject to Section 16 of the 1934 Act, transactions under this Article V
are intended to comply with all applicable conditions of Rule 16b-3 or
its successors under the 1934 Act. To the extent any provision of this
Article V or action by the Board or the Committee fails so to comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
ARTICLE VI
STOCK APPRECIATION RIGHTS
Section 6.1. Grants of SARs.
(a) The Company may grant SARs under this Article VI. SARs
will be deemed granted only upon (i) authorization by the Committee
and (ii) the execution and delivery of a SAR Agreement by the
Eligible Employee to whom the SARs are to be granted (the "SAR
Recipient") and a duly authorized officer of the Company. SARs
will not be deemed granted merely upon authorization by the
Committee. The aggregate number of shares of Stock which shall
underlie SARs granted hereunder shall not exceed the total number
of shares of Stock in the Plan Pool, less all shares of Stock
potentially acquirable under, or underlying, all other Rights
outstanding under this Plan.
(b) Each grants of SARs pursuant to this Article VI shall be
evidenced by a SAR Agreement between the Company and the SAR
Recipient, in form and substance satisfactory to the Committee in
its sole discretion, consistent with this Article VI.
Section 6.2. Terms and Conditions of SARs.
(a) All SARs must be granted within ten (10) years of the
Effective Date.
(b) Each SAR issued pursuant to this Article VI shall have an
initial base value (the "Base Value") equal to the Fair Market
Value of a share of Common Stock on the date of issuance of the SAR
(the "SAR Issuance Date").
(c) In its discretion and subject to the provisions of
Section 6.2(b) (as to the establishment of the initial Base Value
of a SAR), the Committee may establish that the Base Value of a SAR
shall be adjusted, upward or downward, on a quarterly basis, based
upon the market value performance of the Common Stock in comparison
with the aggregate market value performance of the Index or Indices
utilized under Section 3.2(b).
(d) At the discretion of the Committee, a SAR Recipient, as a
condition to the granting of a SAR, must execute and deliver to the
Company a confidential information agreement approved by the
Committee.
(f) Nothing contained in this Article VI, any SAR Agreement
or in any other agreement executed in connection with the granting
of a SAR under this Article VI will confer upon any SAR Recipient
any right with respect to the continuation of his or her status as
an employee of, consultant or independent contractor to, or
director of, the Company or any of its Subsidiaries.
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(g) Except as otherwise provided herein, each SAR Agreement
may specify the period or periods of time within which each SAR or
portion thereof will first become exercisable (the "SAR Vesting
Period"). Such SAR Vesting Periods will be fixed by the Committee
in its discretion, and may be accelerated or shortened by the
Committee in its discretion.
(h) SARs relating to no less than one hundred (100) shares of
Stock may be exercised at any one time unless the number exercised
is the total number at that time exercisable under all SARs granted
to the SAR Recipient.
(i) A SAR Recipient shall have no rights as a shareholder of
the Company with respect to any shares of Stock covered by such
SAR. 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
Sections 2.3(b) and 6.2(c).
Section 6.3. Restrictions on Transfer of SARs. No SAR granted
under this Article VI may be Transferred, except as provided in Section
6.6, and during the lifetime of the SAR Recipient to whom it was
granted, may be exercised only by such SAR Recipient.
Section 6.4. Exercise of SARs.
(a) A SAR Recipient, or his or her executors or
administrators, or heirs or legatees, shall exercise a SAR of the
SAR Recipient by giving written notice of such exercise to the
Company. SARs may be exercised only upon the completion of the SAR
Vesting Period applicable to such SAR.
(b) Within ten (10) days of the SAR Exercise Date applicable
to a SAR exercised in accordance with Section 6.4(a), the SAR
Recipient shall be paid in cash the difference between the Base
Value of such SAR (as adjusted, if applicable, under Section 6.2(c)
as of the most recently preceding quarterly period) and the Fair
Market Value of the Common Stock as of the SAR Exercise Date.
Section 6.5. Termination of SARs.
(a) The Committee shall determine, and each SAR Agreement
shall state, the expiration date or dates of each SAR, but such
expiration date shall be not later than ten (10) years after the
date such SAR is granted (the "SAR Period"). The Committee, in its
discretion, may extend the expiration date or dates of a SAR Period
after such date was originally set; provided, however, such
expiration date may not exceed the maximum expiration date
described in this Section 6.5(a).
(b) To the extent not previously exercised, each SAR will
terminate upon the expiration of the SAR Period specified in the
SAR Agreement; provided, however, that, subject to Section 6.5(a),
each such SAR will terminate upon the earlier of: (i) ninety (90)
days after the date that the SAR Recipient ceases to be an Eligible
Employee for any reason, other than by reason of Death, Disability,
Retirement or a Just Cause Termination; (ii) twelve (12) months
after the date that the SAR Recipient ceases to be an Eligible
Employee by reason of Death, Disability or Retirement; or (iii)
immediately as of the date that the SAR Recipient ceases to be an
Eligible
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Participant by reason of a Just Cause Termination. Any
SARs not exercised within the foregoing periods shall terminate.
Section 6.6. Designation of Beneficiaries. A SAR Recipient may
designate a beneficiary or beneficiaries to receive all or part of the
cash to be paid to the SAR Recipient under this Article VI in case of
Death. A designation of beneficiary may be replaced by a new
designation or may be revoked by the SAR Recipient at any time. A
designation or revocation shall be on a form to be provided for that
purpose and shall be signed by the SAR Recipient and delivered to the
Company prior to the SAR Recipient's Death. In case of the SAR
Recipient's Death, the amounts to be distributed to the SAR Recipient
under this Article VI with respect to which a designation of beneficiary
has been made (to the extent it is valid and enforceable under
applicable law) shall be distributed in accordance with this Article VI
to the designated beneficiary or beneficiaries. The amount
distributable to a SAR Recipient upon Death and not subject to such a
designation shall be distributed to the SAR Recipient's estate. If
there shall be any question as to the legal right of any beneficiary to
receive a distribution under this Article VI, the amount in question may
be paid to the estate of the SAR Recipient, in which event the Company
shall have no further liability to anyone with respect to such amount.
Section 6.7. Amendment and Discontinuance. The Board may amend,
suspend or discontinue the provisions of this Article VI at any time or
from time to time; provided that no action of the Board may, without the
approval of the shareholders of the Company, materially increase (other
than by reason of an adjustment pursuant to Section 2.3(b) hereof) the
maximum aggregate number of shares of Stock in the Plan Pool, materially
increase the benefits accruing to Eligible Employees or materially
modify eligibility requirements for participation under this Article VI.
Moreover, no such action may alter or impair any SAR previously granted
under this Article VI without the consent of the applicable SAR
Recipient.
Section 6.8. Compliance With Rule 16b-3. With respect to persons
subject to Section 16 of the 1934 Act, transactions under this Article
VI are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the 1934 Act. To the extent any provision of
this Article VI or action by the Board or the Committee fails so to
comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Application of Funds. The proceeds received by the
Company from the sale of Stock pursuant to the exercise of Rights will
be used for general corporate purposes.
Section 7.2. No Obligation to Exercise Right. The granting of a
Right shall impose no obligation upon the recipient to exercise such
Right.
Section 7.3. Term of Plan. Except as otherwise specifically
provided herein, Rights may be granted pursuant to this Plan from time
to time within ten (10) years from the Effective Date.
Section 7.4. 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,
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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.
Section 7.5. Expenses of Administration of Plan. All costs and
expenses incurred in the operation and administration of this Plan shall
be borne by the Company or by one or more Subsidiaries. The Company
shall also indemnify, defend and hold each member of the Committee
harmless against all claims, expenses and liabilities arising out of or
related to the exercise of the Committee's powers and the discharge of
the Committee's duties hereunder.
Section 7.6. 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.
Section 7.7. Inspection of Plan. A copy of this Plan, and any
amendments thereto, shall be maintained by the Secretary of the Company
and shall be shown to any proper person making inquiry about it.
Effective: April 28, 1994
22
<PAGE>
BROOKS, PIERCE, MCLENDON, HUMPHREY & LEONARD, L.L.P.
February 21, 1995
(910) 271-3123
Board of Directors
Security Capital Bancorp
507 West Innes Street
Salisbury, North Carolina 21845-3775
Re: Security Capital Bancorp Omnibus Stock Ownership and Long
Term Incentive Plan - Registration Statement on Form S-8
Respecting the Offering of up to 300,000 Shares of Common
Stock
Gentlemen:
We have acted as counsel to Security Capital Bancorp (the
"Company") in connection with the Company's registration under the
Securities Act of 1933, as amended, on Form S-8 (the "Registration
Statement") of its offering of up to 300,000 shares of Common Stock, no par
value (the "Shares") pursuant to the grant of stock options, restricted
stock awards, long term incentive units and stock appreciation rights
(collectively, the "Rights") under the Security Capital Bancorp Omnibus
Stock Ownership and Long Term Incentive Plan (the "Plan"). As such counsel,
we have made such legal and factual examinations and inquiries as we deemed
advisable for the purpose of rendering the opinions set forth herein.
For purposes of rendering our opinion below, we have assumed that
(i) the Shares issuable pursuant to the exercise of Rights granted under the
terms of the Plan will continue to be duly and validly authorized on the
dates the Shares are issued pursuant to the Rights; (ii) on the dates the
Rights are exercised, the Rights granted under the terms of the Plan will
constitute valid, legal and binding obligations of the Company and will
(subject to applicable bankruptcy, moratorium, insolvency, reorganization
and other laws and legal principles affecting the enforceability of
creditors' rights generally) be enforceable against the Company in
accordance with their terms; (iii) no change occurs after the date hereof in
applicable law or the pertinent facts; and (iv) the provisions of applicable
"blue sky" and other state securities laws have been complied with to the
extent required.
<PAGE>
Board of Directors
February 21, 1995
Page 2
Based on the foregoing, and subject to the assumptions set forth
herein, it is our opinion as of the date hereof that the Shares which have
been or are to be issued pursuant to the Plan have been duly and validly
authorized and, upon the issuance or sale of the Shares in accordance with
the Plan and receipt of any consideration required thereby, such shares will
be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement.
Sincerely yours,
BROOKS, PIERCE, MCLENDON, HUMPHREY &
LEONARD, L.L.P.
By:
Signature of Robert A. Singer appears here
Robert A. Singer
SECURITY CAPITAL BANCORP
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or
executive officer of SECURITY CAPITAL BANCORP, a corporation organized
under the laws of the State of North Carolina, does hereby make, constitute
and appoint PRESSLEY A. RIDGILL, his true and lawful attorney-in-fact,
with full power of substitution, to (i) execute, deliver and file, on his
behalf and in his name and in his capacity as set forth below, to the
Registration Statement on Form S-8 with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, together with any and all
exhibits thereto and any and all other documents in support thereof or
supplemental thereto, with respect to the registration of shares of
Common Stock of the Corporation under the Registration Statement on
Form S-8, as amended, in connection with the Corporation's Omnibus
Stock Ownership and Long Term Incentive Plan, and any and all further
amendments to such Registration Statement, and (ii) execute any and
all applications, registration statements, notices and other documents
necessary or advisable to comply with applicable state securities and
blue sky laws and regulations, and to file the same together with all other
exhibits and documents in connection therewith, with the appropriate state
securities and blue sky authorities; and does hereby grant to said
attorney-in-fact power and authority to do and perform each and every
act and thing whatsoever as said attorney-in-fact power and authority to
do and perform each and every act and thing whatsoever as said attorney-in-
fact may deem necessary or advisable to carry out fully the intent of this
instrument, to the same extent and with the same effect as the
undersigned might or could do personally, or in his capacity as set forth
below; and the undersigned does hereby ratify and confirm all acts and
things which said attorney-in-fact may do or cause to be done by virtue
of this instrument.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this
10th day of February, 1995.
John M. Barnhardt
Office
Executed in the presence of:
Kristen B. Evans
Ralph A. Barnhardt
Office
Executed in the presence of:
Kristen B. Evans
Edward A. Brown
Director
Office
Executed in the presence of:
Peggy H. Bollinger
Henry B. Gaye
Director
Office
Executed in the presence of:
Mary M. Hastey
Dan L. Gray
Office
Executed in the presence of:
Kristen B. Evans
Lloyd G. Gurley
Director
Office
Executed in the presence of:
Peggy Bollinger
David B. Jordan
Director
Office
Executed in the presence of:
Brittany S. Jamison
William C. Kluttz, Jr.
Director
Office
Executed in the presence of:
Peggy H. Bollinger
Ervin E. Lampert, Jr.
Office
Executed in the presence of:
Brittany S. Jamison
Frank Taft McCoy, Jr.
Director
Office
Executed in the presence of:
Harold Mowery
Office
Executed in the presence of:
J. G Rutledge, III
Director
Office
Executed in the presence of:
Peggy H. Bollinger
Carl M. Short, Jr.
Director
Office
Executed in the presence of:
Brittany S. Jamison
W. Erwin Spainhour
Director
Office
Executed in the presence of:
Diane E. Miller
Fred J. Stanback, Jr.
Office
Executed in the presence of:
Jimmy K. Stegall
Director
Office
Executed in the presence of:
Debra J. Whitaker
Thomas A. Tate, Sr.
Office
Executed in the presence of:
Brittany S. Jamison
E. William Wagoner
Director
Office
Executed in the presence of:
Loretta M. Carter
James L. Williamson
Office
Executed in the presence of:
Brittany S. jamison
