Registration No._________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST CHARTER CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-1355866
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
22 UNION STREET, NORTH
CONCORD, NORTH CAROLINA 28025
(Address of Principal Executive Offices) (Zip Code)
FIRST CHARTER CORPORATION
RESTRICTED STOCK AWARD PROGRAM
(Full title of the plan)
LAWRENCE M. KIMBROUGH, PRESIDENT
FIRST CHARTER CORPORATION
22 UNION STREET, NORTH
CONCORD, NORTH CAROLINA 28025
(Name and address of agent for service)
(704) 786-3300
Telephone number, including area code, of agent for service
Copy to:
Anne F. Team, Esq.
Smith Helms Mulliss & Moore, L.L.P.
Post Office Box 31247
Charlotte, North Carolina 28231
Approximate date of commencement of proposed sale to the
public: from time to time after the effective date of this
Registration Statement.
CALCULATION OF REGISTRATION FEE
_________________________________________________________________
TITLE OF PROPOSED MAXIMUM
SECURITIES TO AMOUNT TO BE OFFERING PRICE
BE REGISTERED REGISTERED PER UNIT*
Common Stock, 300,000
$5.00 par value Shares $19.50
PROPOSED MAXIMUM AMOUNT OF
AGGREGATE OFFER- REGISTRATION
ING PRICE* FEE
$5,850,000 $2,018
_________________________________________________________________
* Pursuant to Rule 457(c) and (h), based on the price of the
Common Stock of which options granted pursuant to the plan may be
exercised.<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents constituting the Prospectus of First Charter
Corporation (the "Registrant") with respect to this Registration
Statement in accordance with Rule 428 promulgated pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), are
kept on file at the offices of the Registrant. The Registrant
will provide without charge to employees, on the written or oral
request of any such person, a copy of any or all of the documents
constituting the Prospectus. Written requests for such copies
should be directed to the Treasurer, First Charter Corporation,
22 Union Street, North, Concord, North Carolina 28025. Telephone
requests may be directed to (704)786-3300.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Registrant with the
Securities and Exchange Commission (the "Commission") are
incorporated by reference herein and in the Prospectus
constituting a part of this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for
the year ended December 31, 1994, filed pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act");
(b) The Registrant's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1995, filed pursuant to Section 13 of
the Exchange Act; and
(c) The description of the Registrant's Common Stock,
$5 par value, contained in its Registration Statement filed under
the Exchange Act and all amendments and reports filed for the
purpose of updating such description, including the Registrant's
Current Report on Form 8-K dated March 30, 1991.
Any document filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act subsequent to the effectiveness of this Registration
Statement and prior to the filing of a post-effective amendment
hereto which either indicates that all securities offered hereto
have been sold or deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference in this
Registration Statement and the Prospectus and to be a part hereof
and thereof 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 Registration Statement and the
Prospectus to the extent that a statement contained herein or
therein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein or therein
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 Registration
Statement or the Prospectus.
The Registrant will provide without charge to each person to
whom the Prospectus constituting a part of this Registration
Statement is delivered, on the written or oral request of any
such person, a copy of any or all of the documents incorporated
herein and in the Prospectus by reference (other than exhibits to
such documents which are not specifically incorporated by
reference in such documents). Written requests for such copies
should be directed to the Treasurer, First Charter Corporation,
22 Union Street, North, Concord, North Carolina 28025. Telephone
requests may be directed to (704) 786-3300.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
There are no provisions in the Registrant's Articles of
Incorporation, and no contracts between the Registrant and its
directors and officers nor resolutions adopted by the Registrant,
relating to indemnification. However, in accordance with the
provisions of the North Carolina Business Corporation Act (the
"Act"), the Registrant's Bylaws provide that, in addition to the
indemnification of directors and officers otherwise provided by
the Act, the Registrant shall, under certain circumstances,
indemnify its directors, executive officers and certain other
designated officers against any and all liability and litigation
expense, including reasonable attorneys' fees, arising out of
their status or activities as directors and officers, except for
liability or litigation expense incurred on account of activities
that were at the time known or reasonably should have been known
by such director or officer to be clearly in conflict with the
best interests of the Registrant. Pursuant to such Bylaw and as
authorized by statute, the Registrant maintains insurance on
behalf of its directors and officers against liability asserted
against such persons in such capacity whether or not such
directors or officers have the right to indemnification pursuant
to the Bylaw or otherwise. In addition, the Registrant's
Articles of Incorporation prevent the recovery by the Registrant
or any of its shareholders of monetary damages against its
directors.
In addition to the above-described provisions, Sections
55-8-50 through 55-8-58 of the Act contain provisions prescribing
the extent to which directors and officers shall or may be
indemnified. Section 55-8-51 of the Act permits a corporation,
with certain exceptions, to indemnify a present or former
director against liability if (i) he conducted himself in good
faith, (ii) he reasonably believed (x) that his conduct in his
official capacity with the corporation was in its best interests
and (y) in all other cases his conduct was at least not opposed
to the corporation's best interest and (iii) in the case of any
criminal proceeding, he had no reasonable cause to believe his
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 him. The above standard of conduct is
determined by the Board of Directors, or a committee or special
legal counsel or the shareholders as prescribed in Section
55-8-55.
Sections 55-8-52 and 55-8-56 of the Act require a
corporation to indemnify a director or officer in the defense of
any proceeding to which he was a party against reasonable
expenses when he is wholly successful in his defense, unless the
articles of incorporation provide otherwise. Upon application,
the court may order indemnification of the director or officer if
he is adjudged fairly and reasonably so entitled under Section
55-8-54.
In addition, Section 55-8-57 of the Act permits a
corporation to provide for indemnification of directors,
officers, employees or agents, in its articles of incorporation
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 entirety by reference to the relevant statutes
which contain detailed specific provisions regarding the
circumstances under which and the person for whose benefit
indemnification shall or may be made and accordingly are set
forth in Exhibit 99.2 hereto and incorporated herein by
reference.
ITEM 8. EXHIBITS.
The following exhibits are filed with or incorporated by
reference in this Registration Statement.
EXHIBIT NO.
(PER EXHIBIT
TABLES IN
ITEM 601 OF
REGULATION S-K) DESCRIPTION OF EXHIBIT
5.1 Opinion of Smith Helms Mulliss & Moore,
L.L.P. as to legality of securities to
be registered.
23.1 Consent of Smith Helms Mulliss & Moore,
L.L.P. (included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP,
independent certified public
accountants.
24.1 Power of Attorney.
24.2 Certified Resolution authorizing
signature of Registration Statement.
99.1 Restricted Stock Award Program.
99.2 Provisions of North Carolina law
relating to indemnification.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3 or Form
S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Concord, State of North Carolina, on July 10, 1995.
FIRST CHARTER CORPORATION
By:/s/ LAWRENCE M. KIMBROUGH
Lawrence M. Kimbrough
President and Chief Executive
Officer
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.
SIGNATURE TITLE DATE
/S/LAWRENCE M. KIMBROUGH President, Chief Executive July 10, 1995
(Lawrence M. Kimbrough) Officer and Director
(Principal Executive Officer)
/s/ ROBERT O. BRATTON Executive Vice President July 10, 1995
(Robert O. Bratton) (Principal Financial
and Principal Accounting
Officer)
* WILLIAM R. BLACK Director July 10, 1995
(William R. Black)
* JANE B. BROWN Director July 10, 1995
(Jane B. Brown)
* GRADY S. CARPENTER Director July 10, 1995
(Grady S. Carpenter)
* MICHAEL R. COLTRANE Director July 10, 1995
(Michael R. Coltrane)
* J. ROY DAVIS, JR. Director July 10, 1995
(J. Roy Davis, Jr.)
* J. KNOX HILLMAN, JR. Director July 10, 1995
(J. Knox Hillman, Jr.)
* BRANSON C. JONES Director July 10, 1995
(Branson C. Jones)
* D. C. LINN, JR. Director July 10, 1995
(D. C. Linn, Jr.)
* ROBERT F. LOWRANCE Director July 10, 1995
(Robert F. Lowrance)
* HUGH H. MORRISON Director July 10, 1995
(Hugh H. Morrison)
* T. DAVID PROPST Director July 10, 1995
(T. David Propst)
* ROBERT L. WALL Director July 10, 1995
(Robert L. Wall)
* JAMES B. WIDENHOUSE Director July 10, 1995
(James B. Widenhouse)
*By:/A/ LAWRENCE M. KIMBROUGH
Lawrence M. Kimbrough
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
EXHIBIT NO.
(PER EXHIBIT
TABLES IN
ITEM 601 OF SEQUENTIAL
REGULATION S-K) DESCRIPTION OF EXHIBIT PAGE NO.
5.1 Opinion of Smith Helms Mulliss &
Moore, L.L.P. as to legality of
securities to be registered.
23.1 Consent of Smith Helms Mulliss & Moore,
L.L.P. (included in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP,
independent certified public accountants.
24.1 Power of Attorney.
24.2 Certified Resolution authorizing signature
of Registration Statement.
99.1 Restricted Stock Award Program.
99.2 Provisions of North Carolina law relating
to indemnification.
SMITH HELMS MULLISS & MOORE, L.L.P.
Attorneys at Law
P. O. Box 31247
Charlotte, North Carolina 28231
(704) 343-2000
July 10, 1995
First Charter Corporation
22 Union Street North
Concord, North Carolina 28025
Re: Registration Statement on Form S-8
300,000 Shares of Common Stock, $5.00 Par Value
Restricted Stock Award Program
Gentlemen:
In connection with the possible offering and sale from time to
time of up to 300,000 shares of the Common Stock, $5.00 par value
per share (the "Shares"), of First Charter Corporation (the
"Corporation"), upon the terms and conditions set forth in the
Registration Statement on Form S-8 (the "Registration Statement"),
filed on July 10, 1995 by the Corporation with the Securities and
Exchange Commission under the Securities Act of 1933, as amended,
and the prospectus constituting a part thereof (the "Prospectus"),
we are of the opinion that when (a) the Registration Statement
shall become effective and (b) the Shares have been sold upon the
terms and conditions set forth in the Registration Statement and
the Prospectus, the Shares will be validly authorized and legally
issued, fully paid and non-assessable.
We hereby consent (1) to be named in the Registration
Statement and in the Prospectus as attorneys who will pass upon the
legality of the Shares and (2) to the filing of a copy of this
opinion as Exhibit 5.1 to the Registration Statement.
Very truly yours,
SMITH HELMS MULLISS & MOORE, L.L.P.
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
First Charter Corporation
We consent to incorporation by reference in the Registration
Statement on Form S-8 of First Charter Corporation of our report
dated January 20, 1995, relating to the consolidated balance sheets
of First Charter Corporation and subsidiary as of December 31, 1994
and 1993, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1994, which report appears in
the December 31, 1994 Annual Report to Shareholders and is
incorporated by reference in the 1994 Form 10-K.
First Charter adopted the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities," on December 31, 1993 and Statement
of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," on January 1, 1993.
KPMG Peat Marwick LLP
Charlotte, North Carolina
July 7, 1995
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of First Charter
Corporation (the "Corporation") and the several undersigned
Officers and Directors thereof whose signatures appear below
hereby makes, constitutes and appoints Lawrence M. Kimbrough and
Robert O. Bratton, and each of them acting individually, its and
his true and lawful attorneys, with full power to act without the
other and with full power of substitution, to execute, deliver
and file in its and his name and on its and his behalf, and in
each of the undersigned Officer's and Director's capacity or
capacities as shown below, (a) a Registration Statement on Form
S-8 (or other appropriate form) with respect to the registration
under the Securities Act of 1933, as amended (the "Securities
Act"), of 300,000 shares of the Common Stock of the Corporation
for issuance from time to time by the Corporation to various of
its key employees pursuant to the Restricted Stock Award Program,
and any and all amendments, including any and all post-effective
amendments, to the foregoing and any and all documents in support
thereof or supplemental thereto, and (b) such registration
statements, petitions, applications, consents to service of
process or other instruments, and any and all amendments or
supplements to the foregoing and any and all documents in support
thereof or supplemental thereto, as may be necessary or advisable
to qualify or register the securities covered by said
Registration Statement under such state or other securities laws,
regulations and requirements as may be applicable; and each of
the Corporation and said Officers and Directors hereby grants to
said attorneys, and to each of them, full power and authority to
do and perform each and every act and thing whatsoever as said
attorneys or attorney may deem necessary or advisable to carry
out fully the intent of this power of attorney to the same extent
and with the same effect as the Corporation might or could do,
and as each of said Officers and Directors might or could do
personally in his capacity or capacities as aforesaid, and each
of the Corporation and said Officers and Directors hereby
ratifies and confirms all acts and things which said attorneys or
attorney might do or cause to be done by virtue of this power of
attorney and its or his signature as the same may be signed by
said attorneys or attorney, or either of them, to any or all of
the following (and/or any and all amendments and supplements to
any or all thereof): such Registration Statement under the
Securities Act, and all such registration statements, petitions,
applications, consents to service of process and other
instruments, and any and all amendments to the foregoing and any
and all documents in support thereof or supplemental thereto,
under such securities laws, regulations and requirements as may
be applicable.
IN WITNESS WHEREOF, First Charter Corporation has caused
this power of attorney to be signed on its behalf, and each of
the undersigned Officers and Directors of the Corporation in the
capacity or capacities noted has hereunto set his hand on the
date indicated.
FIRST CHARTER CORPORATION
By:/s/LAWRENCE M. KIMBROUGH
Lawrence M. Kimbrough
President and Chief
Executive Officer
Dated: May 17, 1995
<PAGE>
Signature Title Date
/s/LAWRENCE M. KIMBROUGH President, Chief Executive May 17, 1995
Lawrence M. Kimbrough Officer and Director
(Principal Executive Officer)
/s/J. ROY DAVIS, JR. Chairman of the Board May 17, 1995
J. Roy Davis, Jr. and Director
/s/ROBERT O. BRATTON Executive Vice President May 17, 1995
Robert O. Bratton (Principal Financial and
Accounting Officer)
/s/WILLIAM R. BLACK Director May 17, 1995
William R. Black
/s/JANE B. BROWN Director May 17, 1995
Jane B. Brown
/s/GRADY S. CARPENTER Director May 17, 1995
Grady S. Carpenter
/s/MICHAEL R. COLTRANE Director May 17, 1995
Michael R. Coltrane
/s/J. KNOX HILLMAN, JR. Director May 17, 1995
J. Knox Hillman, Jr.
/s/BRANSON C. JONES Director May 17, 1995
Branson C. Jones
/s/D. C. LINN, JR. Director May 17, 1995
D. C. Linn, Jr.
/s/ROBERT F. LOWRANCE Director May 17, 1995
Robert F. Lowrance
/s/HUGH H. MORRISON Director May 17, 1995
Hugh H. Morrison
/s/T. DAVID PROPST Director May 17, 1995
T. David Propst
/s/ROBERT L. WALL Director May 17, 1995
Robert L. Wall
/s/JAMES B. WIDENHOUSE Director May 17, 1995
James B. Widenhouse
CERTIFICATE OF SECRETARY
I, James W. Townsend, Jr., Secretary of First Charter
Corporation, a corporation duly organized and existing under the
laws of the State of North Carolina, do hereby certify that
attached hereto is a true and correct copy of resolutions duly
adopted by the Board of Directors of said corporation at a meeting
of said Board of Directors duly called and held on March 15, 1995,
and that such resolutions are in full force and effect and have not
been amended or rescinded as of the date hereof.
IN WITNESS WHEREOF, I have hereupon set my hand and affixed
the seal of the corporation this 6th day of July, 1995.
\s\ JAMES W. TOWNSEND, JR.
Name: James W. Townsend, Jr.
Title: Secretary
(CORPORATE SEAL)<PAGE>
BOARD OF DIRECTORS OF
FIRST CHARTER CORPORATION
______
RESOLUTIONS
______
March 15, 1995
RESTRICTED STOCK AWARD PROGRAM
WHEREAS, the Board of Directors has determined that it is in
the best interest of the Corporation to establish the First Charter
Corporation Restricted Stock Award Program (the "Program") pursuant
to which the Corporation may from time to time award to key
employees restricted shares of Common Stock, $5.00 par value (the
"Common Stock"), of the Corporation, upon the terms and conditions
and subject to the restrictions contemplated by the Program and the
form of Restricted Stock Award Agreement incorporated therein, in
order to encourage stock ownership of the Corporation by the key
employees of the Corporation and to provide incentive for enhanced
individual and corporate performance;
NOW, THEREFORE, BE IT RESOLVED, that the Restricted Stock
Award Program as presented to the Board of Directors for review be,
and it hereby is, authorized, approved and adopted in all respects,
in substantially the form attached hereto as Exhibit A, with such
changes, modifications and omissions as the President and Chief
Executive Officer or the Chief Financial Officer may approve upon
advice of counsel, that the Program shall be submitted to the
shareholders of the Corporation for approval thereof; and
FURTHER RESOLVED, that the award and issuance by the
Corporation of up to 300,000 shares of the Common Stock under the
Program from time to time be, and hereby is, approved in all
respects, and that 300,000 shares of the Common Stock of the
Corporation be, and they hereby are, reserved for award and
issuance under the Program (the "Shares"); and
FURTHER RESOLVED, that shares, if any, to be issued to a
participant under the Program shall be a form of compensation to
such participant, and the continued employment and achievement of
other individual and corporate goals, if any, by a participant in
the Program shall be adequate consideration for the issuance of
shares to such participant; and
FURTHER RESOLVED, that the proper officers of the Corporation
be, and they hereby are, authorized and empowered (a) to execute
and file with the Securities and Exchange Commission (the "SEC") a
Registration Statement on Form S-8 (or other applicable form as
counsel may advise) under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the possible issuance or
sale from time to time of up to 300,000 shares of Common Stock to
its employees under the Program, with such terms therein as the
officers executing the same may approve, their execution to be
conclusive evidence of such approval, and (b) to execute and file
all such other instruments and documents, to make all such
payments, to do all such other acts and things in connection with
said Registration Statement, including the execution and filing of
such amendment or amendments (including any post-effective
amendments) thereto, as they may deem necessary or advisable in
order to effect such filing and to procure the effectiveness of
said Registration Statement (and any such post-effective amendments
thereto) and to make such supplements to the Prospectus forming a
part of said Registration Statement as may be required or otherwise
as they may deem advisable; and
FURTHER RESOLVED, that Lawrence M. Kimbrough and Robert O.
Bratton and each of them with full power to act without the other,
be, and they hereby are, authorized and empowered to sign the
aforesaid Registration Statement and any amendment or amendments
(including post-effective amendments) thereto on behalf of and as
attorneys for the Corporation and on behalf of and as attorneys for
any of the following, to wit: the principal executive officer, the
principal financial officer, the principal accounting officer, and
any other officer of the Corporation, including the Chairman of the
Board of Directors and the President of the Corporation; and
FURTHER RESOLVED, that Lawrence M. Kimbrough be, and he hereby
is, appointed and designated as the Agent for Service of the
Corporation to be named in the aforesaid Registration Statement,
with authority to receive notices and communications with respect
to the registration of the Shares under the Securities Act, with
all powers and functions consequent upon such designation under the
Rules and Regulations of the SEC; and
FURTHER RESOLVED, that it is desirable and in the best
interest of the Corporation that the Shares be qualified or
registered for distribution in various states where appropriate,
that the Chief Executive Officer, Chief Financial Officer and
Secretary of the Corporation hereby are authorized, empowered and
directed to determine the states in which appropriate action shall
be taken to qualify or register for distribution the Shares as said
officers may deem advisable; that said officers are hereby
authorized,empowered and directed to perform on behalf of the
Corporation any and all such acts as they may deem necessary or
advisable in order to comply with the applicable laws of any such
states, and in connection therewith to execute and file all
requisite papers and documents, including, but not limited to,
resolutions, applications, reports, surety bonds, irrevocable
consents and appointments of attorneys for service of process; and
the execution by such officers of any such paper or document or the
doing by them of any act in connection with the foregoing matters
shall conclusively establish their authority therefor from the
Corporation and the approval and ratification by the Corporation of
the papers and documents so executed and the actions so taken; and
FURTHER RESOLVED, that such officers be, and they hereby are,
authorized and directed to do any and all things which in their
judgment may be necessary or appropriate in order to obtain a
permit, exemption, registration or qualification for, and a
dealer's license with respect to, the distribution of the Shares
under the securities laws of any one or more of the states as such
officers may deem advisable and in connection therewith to execute,
acknowledge, verify, deliver, file and publish all applications,
reports, resolutions, consents, consents to service of process,
powers of attorney, commitments and other papers and instruments as
may be required under such laws and to take any and all further
actions which they may deem necessary or appropriate in order to
secure and to maintain such permits, exemptions, registrations and
qualifications in effect for so long as they shall deem in the best
interest of the Corporation; and
FURTHER RESOLVED, that upon the award and issuance thereof
under the Program, the Shares shall be deemed to be fully paid and
nonassessable and the holders of such Shares shall be subject to no
further call or liability with respect thereto; and
FURTHER RESOLVED, that First Charter National Bank be, and it
hereby is, appointed Transfer Agent and Registrar for such Shares;
and it is hereby vested with all the power and authority as
Transfer Agent and Registrar with respect to said Shares as it has
heretofore been vested with for the shares of the Corporation's
Common Stock currently issued and outstanding; and
FURTHER RESOLVED, that the Board of Directors hereby adopts,
as if expressly set forth herein, the form of any resolution
required by any authority to be filed in connection with any
applications, consents to service or other documents, applications,
reports or filings relating to the foregoing resolutions if (i) in
the opinion of the officers of the Corporation executing same, the
adoption of such resolutions is necessary or desirable and (ii) the
Secretary or an Assistant Secretary of the Corporation evidences
such adoption by inserting in the minutes of this meeting copies of
such resolutions, which will thereupon be deemed to be adopted by
the Board of Directors with the same force and effect as if
presented at this meeting; and
FURTHER RESOLVED, that the officers of the Corporation be, and
they hereby are, authorized, empowered and directed to do any and
all things of any and every nature whatsoever and execute all
instruments, certificates and documents which they in their
discretion deem necessary, appropriate or convenient to carry into
effect the foregoing resolutions and the purpose and intent
thereof.
<PAGE>
FIRST CHARTER CORPORATION
RESTRICTED STOCK AWARD PROGRAM
THIS RESTRICTED STOCK AWARD PROGRAM (the "Program") is
adopted on the 25th day of April, 1995 by First Charter
Corporation (the "Corporation"), a corporation organized and
existing under the laws of the State of North Carolina and having
its principal place of business in Cabarrus County, North
Carolina, to provide an incentive to certain key employees,
including employees who also serve as directors of the
Corporation or a Subsidiary (as hereinafter defined), through the
acquisition of an equity interest in the Corporation. When
selecting the employees eligible to participate in this Program
the Named Fiduciary (as defined in Section 11(c) hereof) will
consider, among other criteria, the position and responsibilities
of the employee, the value of the employee's services to the
Corporation and other such factors as the Named Fiduciary deems
pertinent, and each employee selected to participate in the
Program (individually referred to hereafter as a "Participant")
will enter into a separate written agreement between the
Corporation and the Participant (hereinafter referred to as an
"Agreement").
W I T N E S S E T H:
WHEREAS, each Participant is currently, and will be at the
date of an award, employed by the Corporation or First Charter
National Bank, a wholly owned subsidiary of the Corporation, or
such other subsidiary of the Corporation as may be in existence
at such time (each, a "Subsidiary"), as an executive and
management employee and, as such, is considered to be a member of
a select group of management of the Corporation or a Subsidiary
and/or a highly compensated employee; and
WHEREAS, the Corporation desires to provide deferred
compensation to the Participants, the amount of which is directly
related to the Corporation's continued financial success, in
order to provide an additional incentive to the Participants;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and conditions as will be set forth in the
respective Agreements and hereinafter set forth, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Corporation hereby states:
1. PURPOSE. The purpose of the Program is to provide
deferred compensation and additional equity participation to each
Participant based upon the award of shares of the Corporation's
common stock, $5.00 par value (the "Common Stock"). The shares
of Common Stock that may be granted to the Participants hereunder
are referred to collectively as the "Restricted Stock". The
Program is also intended to benefit the Corporation by creating
an additional incentive for the Participants. The awards of
Restricted Stock hereunder are a matter of separate inducement
and are not in lieu of any salary or other compensation for the
service of any key employee.
2. SHARES. The aggregate amount of Common Stock that may
be awarded to Participants under the Program is 300,000 shares.
Any grant of shares of Restricted Stock will be made from
authorized but unissued shares of Common Stock of the
Corporation.
3. EFFECTIVE DATE. The Effective Date for this Program is
April 25, 1995, or such other date as the Program may be approved
by the shareholders of the Corporation. The Effective Date for
each individual Participant is the Participant's Effective Date
as indicated in the Agreement signed by each Participant, which
is incorporated herein and made an integral part of this Program.
4. GRANT AND VESTING OF RESTRICTED STOCK.
4.1. GRANT. The Named Fiduciary may from time to time
grant to a Participant shares of Restricted Stock, with the
number of any such shares so granted and the terms and conditions
of such grant being indicated in such Participant's Agreement.
The Restricted Stock will be granted based upon and at all times
subject to the provisions, conditions and restrictions in such
Participant's Agreement and shall entitle the Participant to the
rights set forth in this Program.
4.2. VESTING. Subject at all times to the provisions
of Section 4.4, the Restricted Stock may vest in a Participant on
the basis of the number of Vesting Credits which such Participant
accumulates during the Vesting Period. A Vesting Credit shall
accrue on the basis of the Corporation's fiscal year, or the
fiscal year plus one or more other factors, or any combination of
factors, as indicated in the Participant's Agreement.
For purposes of this Program the following definitions shall
control:
"Vested Percentage" shall be a percentage determined on the
basis of the number of the Participant's Vesting Credits as
specified in the Participant's Agreement.
A "Vesting Credit" shall accrue for each Year beginning with
the first Year ending after the Participant's Effective Date at
the end of which the Participant is serving as a full-time
employee of the Corporation or a Subsidiary and during which the
Participant meets the business performance requirements, if any,
as specified in the Participant's Agreement.
"Vesting Period" shall mean the Years during which a
Participant may accrue one or more Vesting Credits. No
additional vesting shall accrue after the expiration of the
Vesting Period, and all unvested Shares shall become the property
of the Corporation pursuant to Section 4.3 at the end of the
Vesting Period.
"Year" shall mean the fiscal year utilized by the
Corporation for federal income tax purposes.
4.3. UNVESTED SHARES. All Shares in which the
Participant does not become vested pursuant to Sections 4.2 and
4.4 hereof shall be the property of the Corporation upon the
first to occur of the end of the Participant's employment with
the Corporation or a Subsidiary or the expiration of the Vesting
Period, and the Participant shall cease to have any rights with
respect thereto.
4.4. ACCELERATED VESTING. In the event that a
Participant's employment with the Corporation ends due to the
Participant's death, disability (as defined in the First Charter
Corporation Comprehensive Stock Option Plan) or retirement with
the consent of the Corporation, or because the Corporation
undergoes a "Change in Control" (as hereinafter defined), then
the Participant's Vested Percentage shall be one hundred percent
(100%), regardless of the Participant's Vesting Credit. For
purposes of this Program, a "Change in Control" shall mean (i)
the consummation of a merger, consolidation, share exchange or
similar transaction of the Corporation with any other corporation
as a result of which the holders of the voting capital stock of
the Corporation as a group would receive less than 50% of the
voting capital stock of the surviving or resulting corporation;
(ii) the sale or transfer (other than as security for obligations
of the Corporation) of substantially all the assets of the
Corporation; (iii) in the absence of a prior expression of
approval by the Board of Directors of the Corporation, the
acquisition of more than 20% of the Corporation's voting capital
stock by any person within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
other than a person, or group including a person, who
beneficially owned, as of the effective date of the Program, more
than 5% of the Corporation's securities; (iv) during any period
of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Corporation
cease for any reason to constitute at least a majority thereof
unless the election, or the nomination for election by the
Corporation's shareholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period; or (v)
any other change in control of the Corporation of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A under the Exchange Act or the
acquisition of control, within the meaning of Section 2(a)(2) of
the Bank Holding Company Act of 1956, as amended, or Section 602
of the Change in Bank Control Act of 1978, of the Corporation by
any person, company or other entity.
5. RIGHTS IN UNVESTED SHARES OF RESTRICTED STOCK. Prior
to the vesting of shares of Restricted Stock, a Participant may
not sell, transfer, assign, pledge, hypothecate or otherwise
dispose of, grant a security interest in or encumber any of such
shares of Restricted Stock, and any such attempted disposition or
encumbrance shall be void and unenforceable against the
Corporation. Subject to the provisions of Section 4.3 hereof, a
Participant shall, however, be entitled to any voting rights with
respect to such shares of Restricted Stock and shall be entitled
to receive any cash dividends made with respect to such shares of
Restricted Stock. Any shares issued by the Corporation pursuant
to a stock dividend or stock split in respect of shares of
Restricted Stock prior to the vesting of such shares of
Restricted Stock shall be subject to the same vesting and other
restrictions, terms and conditions under the Program and the
Participant's Agreement as the shares of Restricted Stock in
respect of which the shares are issued.
6. CERTIFICATES, ETC. The Corporation shall issue a
certificate representing a Participant's shares of Restricted
Stock as soon as practicable following execution by such
Participant of his or her Agreement. The certificate
representing all of the unvested shares of Restricted Stock
issued to a Participant shall have endorsed across the face or
back thereof a legend substantially in the following form: "The
shares of stock represented by this certificate are subject to
the terms and conditions of the First Charter Corporation
Restricted Stock Award Program dated April 25, and a Restricted
Stock Award Agreement entered into between the Corporation and
the holder of this certificate, which program and agreement are
on file with the Secretary of the Corporation. The shares of
stock represented by this certificate may not be sold,
transferred, assigned, pledged, hypothecated or otherwise
disposed of or encumbered except in accordance with the
provisions of such program and agreement." Prior to the vesting
of such shares of Restricted Stock in accordance with the
provisions hereof and of the Participant's Agreement, the
certificate representing such shares may be held by the
Corporation or First Charter National Bank, as custodian, on
behalf of such Participant. The Named Fiduciary may require a
Participant to execute and deliver to the Corporation stock
powers with respect to the shares of Restricted Stock to be held
by the custodian.
The Corporation may issue such "stop transfer" instructions
as it determines to be necessary or appropriate to implement the
provisions of a Participant's Agreement with respect to such
Participant's Restricted Stock.
7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. The total
number of shares of Restricted Stock granted, or which may be
granted, under the Program shall be appropriately adjusted for
any increase or decrease in the number of outstanding shares of
Common Stock resulting from payment of a stock dividend on the
Common Stock, a subdivision or combination of shares of the
Common Stock or from a reclassification of the Common Stock.
Such adjustments shall be determined by the Board of Directors of
the Corporation in its sole discretion. Any such adjustment may
provide for the elimination of any fractional share which might
otherwise result. The grant or award of shares of Restricted
Stock under the Program shall not affect in any way the right or
power of the Corporation or any Subsidiary to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge or consolidate, or to dissolve,
liquidate or sell, or transfer all or part of its business or
assets.
8. ANNUAL STATEMENT. On or before ninety (90) days after
the end of each calendar year, the Corporation shall furnish a
written statement to each Participant indicating the Vested
Percentage of such Participant's Restricted Stock as of the end
of such calendar year.
9. INDEMNIFICATION AND EXPENSES. All expenses and costs
in connection with the administration of the Plan shall be borne
by the Corporation. In addition to and consistent with such
other rights of indemnification as they may have, any individual
or group of individuals appointed by the Corporation to
administer the Program shall be indemnified by the Corporation,
individually and jointly, against all costs and expenses
reasonably incurred by them or any of them in connection with any
action, suit or proceeding to which they or any of them may be a
party by reason of any action taken or failure to act under or in
connection with the Program or any award of Restricted Stock
granted pursuant thereto and against all amounts paid by them in
settlement thereof (provided such settlement is approved by legal
counsel selected by the Corporation) or paid by them in
satisfaction of the judgment in any action, suit or proceeding;
provided, that upon institution of any such action, suit or
proceeding, the person desiring indemnification shall give the
Corporation an opportunity, at the expense of the Corporation to
handle and defend the same.
10. COMPLIANCE WITH LAWS AND REGULATIONS. The shares of
Restricted Stock that may be granted hereunder and the obligation
of the Corporation to deliver such shares is subject to all
applicable federal and state laws, rules and regulations, and to
such approvals by any governmental or regulatory agencies as may
be required. With respect to persons subject to Section 16 of
the Exchange Act, transactions under this Program are intended to
comply with all applicable conditions of Rule 16b-3 or any
successor provision under the Exchange Act. To the extent that
any provision of the Program or a Participant's Agreement or
action by the Named Fiduciary fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed
advisable by the Named Fiduciary.
<PAGE>
11. MISCELLANEOUS PROVISIONS.
(a) Nothing contained in this Program or in a
Participant's Agreement, and no action taken pursuant to the
provisions hereof or thereof by any party hereto or thereto,
shall create, or be construed to create, a trust of any
kind, or a fiduciary relationship between the Corporation or
any Subsidiary, on the one hand, and a Participant, any
beneficiary or any other person, on the other.
(b) Nothing contained in this Program or in a
Participant's Agreement shall be construed to be a contract
of employment for any term of years or as conferring upon a
Participant the right to continue in the employ of the
Corporation or a Subsidiary in any capacity. It is
expressly understood by the Corporation and each Participant
that the Program and such Participant's Agreement relate
exclusively to additional compensation for such
Participant's services, payable as set forth herein, and are
not intended to be an employment contract.
(c) The Program will be administered by a committee of
the Board of Directors of the Corporation consisting of all
members of such Board of Directors who constitute
"disinterested persons" within the meaning of Rule 16b-3
under the Exchange Act, which committee shall be designated
as the Named Fiduciary of this Program. Subject to the
provisions of this Program, the Named Fiduciary will have
authority, in its sole discretion, to determine which key
employees of the Corporation and its Subsidiaries shall be
Participants in the Program; any individual or corporate
performance goals applicable to a Participant; the number of
shares of Restricted Stock to be awarded to a Participant,
if any; the restrictions to be applicable to such shares of
Restricted Stock; and all other terms of the award of
Restricted Stock, which need not be the same for all
Participants. The Named Fiduciary also shall have full
power and authority to interpret, construe and administer
this Program. The Named Fiduciary shall, in no event, be
liable to any person for any action taken or omitted to be
taken in connection with the interpretation, construction,
or administration of this Program, so long as such action or
omission to act is made in good faith. Such committee, when
acting as the Named Fiduciary, shall operate in accordance
with the bylaws of the Corporation in all respects,
including but not limited to provisions regarding quorums
and voting by the Board of Directors or a committee thereof.
(d) The Corporation or a Subsidiary, as the case may
be, may deduct any taxes or other liabilities required by
law to be withheld with respect to the grant or vesting of
any shares of Restricted Stock hereunder. The grant or
vesting of such shares of Restricted Stock is subject to the
condition that such withholding tax or other withholding
liabilities shall have been satisfied in a manner acceptable
to the Corporation. If so set forth in a Participant's
Agreement, a Participant may satisfy any such withholding
requirement by electing to have a number of shares withheld
from the shares of Restricted Stock otherwise issuable upon
the granting or vesting of such Restricted Stock, as the
case may be, equal in value to the aggregate withholding tax
or other liabilities. The value of a share of Restricted
Stock shall be determined by reference to the closing price
of the Common Stock (as of the date immediately preceding
the date as of which such withholding amount is required to
be determined) if the Common Stock is listed on a national
securities exchange or reported on the NASDAQ National
Market; or the average of the closing bid and asked prices
for the Common Stock in the over-the-counter market as
reported by the NASDAQ Stock Market for such date if the
Common Stock is not listed on a national securities exchange
or the NASDAQ National Market; or the fair value thereof
determined in good faith by the Board of Directors of the
Corporation if the Common Stock is not listed on a national
securities exchange or reported or quoted on the NASDAQ
National Market or the NASDAQ Stock Market.
(e) The Program may be amended, modified, terminated
or suspended by the Named Fiduciary in its sole discretion
at any time and in any respect as deemed in the best
interest of the Corporation; provided that no such amendment
or modification hereto shall (i) increase the number of
shares of Common Stock which may be awarded as Restricted
Stock under the Program or (ii) without the consent of a
Participant, reduce the amount of any benefit or adversely
change the terms and conditions as specified in such
Participant's Agreement with respect to any outstanding
shares of Restricted Stock. The Board of Directors of the
Corporation shall submit any amendments to the Program to
the shareholders of the Corporation for approval to the
extent necessary to maintain compliance with the
requirements of Rule 16b-3 of the Exchange Act.
(f) This Program shall be binding upon and inure to
the benefit of the Corporation and its successors and
assigns and each Participant, his or her successors,
assigns, heirs, personal representative, and beneficiaries.
(g) Any notice, consent, or demand required or permit-
ted to be given under the provisions of this Program shall
be in writing and shall be signed by the party giving or
making the same. If such notice, consent, or demand is
mailed to a party hereto, it shall be sent by United States
certified mail, postage prepaid, addressed, (i) if to the
Named Fiduciary, to First Charter Corporation, 22 Union
Street, North, Concord, North Carolina 28025, Attention:
Chief Financial Officer; (ii) if to the Participant, to the
address shown in the Agreement; and (iii) if to another
party, to such party's last known address as shown on the
records of the Corporation. The date of such mailing shall
be deemed to be the date of the notice, consent or demand.
A party may designate a different address for notices by
giving the other party written notice to such effect in the
manner hereinabove prescribed.
(h) Words used herein in the masculine gender shall be
read in the feminine or neuter whenever the context so
requires.
(i) This Program and the rights of the Corporation and
Participant shall be governed by and construed in accordance
with the laws of the State of North Carolina.
(j) The underlying captions set forth in this Program
at the beginning of the various divisions hereof are for
convenience of reference only and shall not be deemed to
define or limit the provisions thereof or to affect in any
way their construction and application.
(k) A Participant may not assign any rights hereunder.
(l) The invalidity of any provision of the Program or
any Agreement shall not in any manner affect the validity of
any other provisions contained herein or therein, and each
and every provision of the Program and any Participant's
Agreement shall be enforceable regardless of the invalidity,
if any, of any other provision contained therein. In the
event that it should be finally judicially determined at any
time that the Program, or a particular grant of Restricted
Stock, is invalid because of the length of its duration,
then, in that event and in that event only, the Program
shall remain in full force and effect for such period as, in
view of all the circumstances, shall be deemed reasonable by
the court passing thereon.
(m) If, under any provision of the Program which
requires a computation of the number of Shares, the number
so computed is not a whole number, such number shall be
rounded down to the next whole number.
(n) The Program and each respective Agreement set
forth the entire understanding of the parties and supersede
all prior agreements, arrangements and communications,
whether oral or written, pertaining to the shares of
Restricted Stock with respect to each Participant.
(o) The Corporation represents that by proper
corporate action it has been authorized to enter into and be
bound by this Program.
<PAGE>
IN WITNESS WHEREOF, the Corporation has executed this
Program as of the day and year first above written.
PROVISIONS OF NORTH CAROLINA BUSINESS CORPORATION ACT
REGARDING INDEMNIFICATION
"55-8-50. Policy statement and definitions.
(a) It is the public policy of this State to enable
corporations organized under this Chapter to attract and maintain
responsible, qualified directors, officers, employees and agents,
and, to that end, to permit corporations organized under this
Chapter to allocate the risk of personal liability of directors,
officers, employees and agents through indemnification and
insurance as authorized in this Part.
(b) Definitions in this Part:
(1) 'Corporation' includes any domestic or foreign
corporation absorbed in a merger which, if its
separate existence had continued, would have had
the obligation or power to indemnify its
directors, officers, employees, or agents, so that
a person who would have been entitled to receive
or request indemnification from such corporation
if its separate existence had continued shall
stand in the same position under this Part with
respect to the surviving corporation.
(2) 'Director' means an individual who is or was a
director of a corporation or an individual who,
while a director of a corporation, is or was
serving at the corporation's request as a
director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee
benefit plan, or other enterprise. A director is
considered to be serving an employee benefit plan
at the corporation's request if his duties to the
corporation also impose duties on, or otherwise
involve services by, him to the plan or to
participants in or beneficiaries of the plan.
'Director' includes, unless the context requires
otherwise, the estate or personal representative
of a director.
(3) 'Expenses' means expenses of every kind incurred
in defending a proceeding, including counsel fees.
(4) 'Liability' means the obligation to pay a
judgment, settlement, penalty, fine (including an
excise tax assessed with respect to an employee
benefit plan), or reasonable expenses incurred
with respect to a proceeding.
(4a) 'Officer', 'employee', or 'agent' includes, unless
context requires otherwise, the estate or personal
representative of a person who acted in that
capacity.
(5) 'Official capacity' means: (i) when used with
respect to a director, the office of director in a
corporation; and (ii) when used with respect to an
individual other than a director, as contemplated
in G.S. 55-8-56, the office in a corporation held
by the officer or the employment or agency
relationship undertaken by the employee or agent
on behalf of the corporation. 'Official capacity'
does not include service for any other foreign or
domestic corporation or any partnership, joint
venture, trust, employee benefit plan, or other
enterprise.
(6) 'Party' includes an individual who was, is, or is
threatened to be made a named defendant or
respondent in a proceeding.
(7) 'Proceeding' means any threatened, pending, or
completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative
and whether formal or informal.
55-8-51. Authority to indemnify.
(a) Except as provided in subsection (d), a corporation may
indemnify an individual made a party to a proceeding because he
is or was a director against liability incurred in the proceeding
if:
(1) He conducted himself in good faith; and
(2) He reasonably believed (i) in the case of conduct
in his official capacity with the corporation,
that his conduct was in its best interests; and
(ii) in all other cases, that his conduct was at
least not opposed to its best interests; and
(3) In the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was
unlawful.
(b) A director's conduct with respect to an employee
benefit plan for a purpose he reasonably believed to be in the
interests of the participants in and beneficiaries of the plan is
conduct that satisfies the requirement of subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment, order,
settlement, conviction, or upon a plea of no contest or its
equivalent is not, of itself, determinative that the director did
not meet the standard of conduct described in this section.
(d) A corporation may not indemnify a director under this
section:
(1) In connection with a proceeding by or in the right
of the corporation in which the director was
adjudged liable to the corporation; or
(2) In connection with any other proceeding charging
improper personal benefit to him, whether or not
involving action in his official capacity, in
which he was adjudged liable on the basis that
personal benefit was improperly received by him.
(e) Indemnification permitted under this section in
connection with a proceeding by or in the right of the
corporation that is concluded without a final adjudication on the
issue of liability is limited to reasonable expenses incurred in
connection with the proceeding.
(f) The authorization, approval or favorable recommendation
by the board of directors of a corporation of indemnification, as
permitted by this section, shall not be deemed an act or
corporate transaction in which a director has a conflict of
interest, and no such indemnification shall be void or voidable
on such ground.
55-8-52. Mandatory indemnification.
Unless limited by its articles of incorporation, a
corporation shall indemnify a director who was wholly successful,
on the merits or otherwise, in the defense of any proceeding to
which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in
connection with the proceeding.
55-8-53. Advance for expenses.
Expenses incurred by a director in defending a proceeding
may be paid by the corporation in advance of the final
disposition of such proceeding as authorized by the board of
directors in the specific case or as authorized or required under
any provision in the articles of incorporation or bylaws or by
any applicable resolution or contract upon receipt of an
undertaking by or on behalf of the director to repay such amount
unless it shall ultimately be determined that he is entitled to
be indemnified by the corporation against such expenses.
55-8-54. Court-ordered indemnification.
Unless a corporation's articles of incorporation provide
otherwise, a director of the corporation who is a party to a
proceeding may apply for indemnification to the court conducting
the proceeding or to another court of competent jurisdiction. On
receipt of an application, the court after giving any notice the
court considers necessary may order indemnification if it
determines:
(1) The director is entitled to mandatory
indemnification under G.S. 55-8-52, in which case
the court shall also order the corporation to pay
the director's reasonable expenses incurred to
obtain court-ordered indemnification; or
(2) The director is fairly and reasonably entitled to
indemnification in view of all the relevant
circumstances, whether or not he met the standard
of conduct set forth in G.S. 55-8-51 or was
adjudged liable as described in G.S. 55-8-51(d),
but if he was adjudged so liable his
indemnification is limited to reasonable expenses
incurred.
55-8-55. Determination and authorization of indemnification.
(a) A corporation may not indemnify a director under
G.S. 55-8-51 unless authorized in the specific case after a
determination has been made that indemnification of the director
is permissible in the circumstances because he has met the
standard of conduct set forth in G.S. 55-8-51.
(b) The determination shall be made:
(1) By the board of directors by majority vote of a
quorum consisting of directors not at the time
parties to the proceeding;
(2) If a quorum cannot be obtained under subdivision
(1), by majority vote of a committee duly
designated by the board of directors (in which
designation directors who are parties may
participate), consisting solely of two or more
directors not at the time parties to the
proceeding;
(3) By special legal counsel (i) selected by the board
of directors or its committee in the manner
prescribed in subdivision (1) or (2); or (ii) if a
quorum of the board of directors cannot be
obtained under subdivision (1) and a committee
cannot be designated under subdivision (2),
selected by majority vote of the full board of
directors (in which selection directors who are
parties may participate); or
(4) By the shareholders, but shares owned by or voted
under the control of directors who are at the time
parties to the proceeding may not be voted on the
determination.
(c) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible, except
that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under
subsection (b)(3) to select counsel.
55-8-56. Indemnification of officers, employees, and agents.
Unless a corporation's articles of incorporation provide
otherwise:
(1) An officer of the corporation is entitled to
mandatory indemnification under G.S. 55-8-52, and
is entitled to apply for court-ordered
indemnification under G.S. 55-8-54, in each case
to the same extent as a director;
(2) The corporation may indemnify and advance expenses
under this Part to an officer, employee, or agent
of the corporation to the same extent as to a
director; and
(3) A corporation may also indemnify and advance
expenses to an officer, employee, or agent who is
not a director to the extent, consistent with
public policy, that may be provided by its
articles of incorporation, bylaws, general or
specific action of its board of directors, or
contract.
55-8-57. Additional indemnification and insurance.
(a) In addition to and separate and apart from the
indemnification provided for in G.S. 55-8-51, 55-8-52, 55-8-54,
55-8-55 and 55-8-56, a corporation may in its articles of
incorporation or bylaws or by contract or resolution indemnify or
agree to indemnify any one or more of its directors, officers,
employees, or agents against liability and expenses in any
proceeding (including without limitation a proceeding brought by
or on behalf of the corporation itself) arising out of their
status as such or their activities in any of the foregoing
capacities; provided, however, that a corporation may not
indemnify or agree to indemnify a person against liability or
expenses he may incur on account of his activities which were at
the time taken known or believed by him to be clearly in conflict
with the best interests of the corporation. A corporation may
likewise and to the same extent indemnify or agree to indemnify
any person who, at the request of the corporation, is or was
serving as a director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise or as trustee or
administrator under an employee benefit plan. Any provision in
any articles of incorporation, bylaw, contract, or resolution
permitted under this section may include provisions for recovery
from the corporation of reasonable costs, expenses, and
attorneys' fees in connection with the enforcement of rights to
indemnification granted therein and may further include
provisions establishing reasonable procedures for determining and
enforcing the rights granted therein.
(b) The authorization, adoption, approval, or favorable
recommendation by the board of directors of a public corporation
of any provision in any articles of incorporation, bylaw,
contract or resolution, as permitted in this section, shall not
be deemed an act or corporate transaction in which a director has
a conflict of interest, and no such articles of incorporation or
bylaw provision or contract or resolution shall be void or
voidable on such grounds. The authorization, adoption, approval,
or favorable recommendation by the board of directors of a
nonpublic corporation of any provision in any articles of
incorporation, bylaw, contract or resolution, as permitted in
this section, which occurred on or prior to July 1, 1990, shall
not be deemed an act or corporate transaction in which a director
has a conflict of interest, and no such articles of
incorporation, bylaw provision, contract or resolution shall be
void or voidable on such grounds. Except as permitted in
G.S. 55-8-31, no such bylaw, contract, or resolution not adopted,
authorized, approved or ratified by shareholders shall be
effective as to claims made or liabilities asserted against any
director prior to its adoption, authorization, or approval by the
board of directors.
(c) A corporation may purchase and maintain insurance on
behalf of an individual who is or was a director, officer,
employee, or agent of the corporation, or who, while a director,
officer, employee, or agent of the corporation, is or was serving
at the request of the corporation as a director, officer,
partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise, against liability asserted
against or incurred by him in that capacity or arising from his
status as a director, officer, employee, or agent, whether or not
the corporation would have power to indemnify him against the
same liability under any provision of this act.
55-8-58. Application of Part.
(a) If articles of incorporation limit indemnification or
advance for expenses, indemnification and advance for expenses
are valid only to the extent consistent with the articles.
(b) This Part does not limit a corporation's power to pay
or reimburse expenses incurred by a director in connection with
his appearance as a witness in a proceeding at a time when he has
not been made a named defendant or respondent to the proceeding.
(c) This Part shall not affect rights or liabilities
arising out of acts or omissions occurring before July 1, 1990."
