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
1993 EMPLOYEE STOCK PURCHASE PLAN
(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, 100,000
$5.00 par value Shares $10.13
PROPOSED MAXIMUM AMOUNT OF
AGGREGATE OFFER- REGISTRATION
ING PRICE* FEE
$1,013,000 $350
_________________________________________________________________
* Pursuant to Rule 457(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 1993 Employee Stock Purchase Plan.
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:/S. 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 1993 Employee Stock Purchase Plan.
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
July 10, 1995
First Charter Corporation
22 Union Street North
Concord, North Carolina 28025
Re: Registration Statement on Form S-8
100,000 Shares of Common Stock, $5.00 Par Value
1993 Employee Stock Purchase Plan
Gentlemen:
In connection with the possible offering and sale from time
to time of up to 100,000 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 100,000 shares of the Common Stock of the Corporation
for sale from time to time by the Corporation to various of its
key employees pursuant to the exercise of options granted under
the 1993 Employee Stock Purchase Plan, 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 and May 17, 1995
J. Roy Davis, Jr. 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 February 17,
1993, 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
______
February 17, 1993
1993 EMPLOYEE STOCK PURCHASE PLAN
WHEREAS, the Corporation currently maintains the 1991 Employee
Stock Purchase Plan (the "1991 ESPP"), pursuant to which options
covering an aggregate of 29,857 shares have been granted, which
options are exercisable in January 1994; and
WHEREAS, pursuant to the terms of the 1991 ESPP, no more
options are available to be granted pursuant thereto; and
WHEREAS, the Board of Directors has determined that it is in
the best interest of the Corporation to provide a new employee
stock purchase plan offering up to 100,000 shares of the
Corporation to encourage stock ownership of the Corporation by the
employees of the Corporation;
NOW, THEREFORE, BE IT RESOLVED, that the 1993 Employee Stock
Purchase Plan (the "Plan") 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 advise of counsel;
FURTHER RESOLVED, that 100,000 shares of the Common Stock of
the Corporation be, and they hereby are, reserved for issuance
pursuant to the exercise of options granted under the Plan (the
"Shares");
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 sale from time
to time of up to 100,000 shares of Common Stock to its employees
pursuant to the exercise of options issued under the Plan, with
such terms therein as the officers executing the same may approve,
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
any post-effective amendments) as they may deem necessary or
advisable in order to effect such filing and to procure the
effectiveness of said Registration Statement (including any post-
effective amendments) and to make such supplements to the
Prospectus forming a part of said Registration Statement on Form S-
8 as may be required or otherwise as they may deem advisable;
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 on Form S-8 and any amendments
(including post-effective amendments) thereto on behalf of and as
attorneys for the Corporation and any of the following, to wit:
the principal executive officer, the principal financial officer,
the principal accounting officer, and any other officer or director
of the Corporation, including the Chairman of the Board of
Directors, the Vice Chairman of the Board of Directors and the
President of the Corporation.
FURTHER RESOLVED, that Lawrence M. Kimbrough be, and he hereby
is, appointed as the Agent for Service 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 consequent upon such
designation under the Rules and Regulations of the SEC;
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 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 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;
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;
FURTHER RESOLVED, that upon the issuance thereof pursuant to
the exercise of options granted under the Plans, 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 the officers of the Corporation be, and
they hereby are, authorized and directed to do 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
1993 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I. PURPOSES:
This First Charter Corporation 1993 Employee Stock Purchase
Plan (hereinafter called the "Plan") is intended to be an
employment incentive and to encourage stock ownership by all
eligible employees, including officers, of First Charter
Corporation (hereinafter called the "Corporation") and its
subsidiary corporations (the "Subsidiaries"), as that term is
defined in Section424(f) of the Internal Revenue Code of 1986, as
now in force or hereafter amended (the "Code"), in order to
increase their proprietary interest in the Corporation's success
and to encourage them to remain in the employ of the Corporation
or a Subsidiary. It is further intended that options issued
pursuant to this Plan (hereinafter called "Options") shall
constitute options issued pursuant to an "employee stock purchase
plan" within the meaning of Section423 of the Code.
ARTICLE II. ADMINISTRATION:
The Plan shall be administered by the Personnel and Stock
Option Committee of the Board of Directors of the Corporation
(the "Committee"). No member of the Board of Directors who is
not otherwise employed by the Corporation shall be eligible to
receive an Option. No director who is or within the preceding
year has been eligible to receive an Option may serve as a member
of the Committee. Subject to the provisions of the Plan, the
Committee may, from time to time, prescribe rules and regulations
for the administration of the Plan and may decide questions which
may arise with respect to the interpretation or application of
said Plan.
ARTICLE III. ELIGIBILITY:
Each employee of the Corporation and of its Subsidiaries
(including officers) shall be granted as of a date to be
determined by the Board of Directors (the "Option Date"), but in
no instance more than twelve (12) months after the shareholders
of the Corporation have approved the Plan, which shareholder
approval shall be considered to be the Plan's adoption within the
meaning of Section423 of the Code, an Option under this Plan to
purchase the Corporation's authorized but unissued $5.00 Par
Value Common Stock (herein sometimes called "Common Stock"),
except that there shall be excluded: (i) employees whose
customary employment is under twenty (20) hours per week; (ii)
employees whose customary employment is for not more than five
(5) months in any calendar year; and (iii) any employee who, if
having received an Option hereunder, would own, immediately after
the Option was granted, stock possessing five (5%) percent or
more of the total combined voting power or value of any classes
of stock of the Corporation, or of any of its Subsidiaries. For
purposes of determining stock ownership of an employee under
(iii) hereof, the rules of Section424(d) of the Code and Treasury
Regulations Section1.423-2(d) of the Treasury Regulations shall
apply, and Common Stock which the employee may purchase under any
outstanding options shall be treated as owned by the employee.
ARTICLE IV. STOCK:
The stock subject to the Options to be issued hereunder
shall be the Corporation's Common Stock. The maximum number of
such shares to be issued upon the exercise of the Options hereby
granted shall be an aggregate of 100,000 shares.
An eligible employee (hereinafter called "Optionee") shall
receive an Option to purchase up to the largest whole number of
shares obtained by dividing Optionee's Annual Compensation (as
hereinafter defined) by One Hundred Dollars ($100.00). The term
"Annual Compensation" as used herein is defined as regular fixed
basic annual compensation at the rate in effect on the Option
Date, and does not include any bonus, overtime payment, sales
commission, contribution to an employee benefit plan or other
similar payment or contribution.
Except as expressly provided otherwise in Article V hereof,
payment for Common Stock purchased under the Option shall be made
only by payroll deductions over the designated Purchase Period
(as hereinafter defined).
Notwithstanding the foregoing provisions of this Plan, no
Option shall permit an Optionee to purchase in any single
calendar year a number of shares which, together with all other
shares in the Corporation and any Subsidiaries which such
Optionee may be entitled to purchase in such year pursuant to
Options issued under any employee stock purchase plan, has an
aggregate fair market value (determined in each case as of the
date such options are granted) in excess of $25,000. This
limitation applies only to Options granted under "employee stock
purchase plans" as defined by Section423 of the Code, and does
not limit the amount of stock which an Optionee may purchase
under any other stock option or bonus plans then in effect.
ARTICLE V. TERMS AND CONDITIONS OF OPTIONS:
Options granted hereunder shall be evidenced by a Notice of
the Grant of an Option to each Optionee, which notice shall: (i)
be in such form as the Board of Directors shall determine; (ii)
incorporate, by reference, the terms and provisions of this Plan;
and (iii) be issued to each Optionee on or about the Option Date.
Subject always to the requirement that, except as otherwise
specified in Article IV hereof, all Optionees shall have the same
rights and privileges, such Options shall be subject to the
following terms and conditions:
(a) OPTION PRICE: The price of shares purchased under any
Option issued hereunder (the "Option Price") shall be an amount
equal to ninety (90%) percent of the fair market value of the
Common Stock on the Option Date but not less than the par value
of such stock. For so long as shares of the Common Stock of the
Corporation are listed on a national securities exchange or the
National Association of Securities Dealers Automated Quotations
System ("NASDAQ") National Market System ("NMS"), "fair market
value" as of a given date shall mean, for purposes of this Plan,
the mean between the high and low sales prices of the Common
Stock on that date, said mean to be based on the sale of minimum
of 100 shares of said stock; or if less than 100 shares of said
stock are sold on such date or if no sales prices are quoted,
"fair market value" shall mean the average of the closing bid and
asked prices for such stock in the over-the-counter market as
reported by NASDAQ. If the Common Stock is not listed on a
national securities exchange or the NASDAQ NMS or quoted in the
over-the-counter market, "fair market value" shall be the fair
value thereof determined in good faith by the Board of Directors.
In making such determination, the Board of Directors shall
consider the financial condition of the Corporation and its
recent operating results, values of publicly-traded securities of
other financial institutions giving effect to the relative book
values and earnings of such institutions and the lack of
liquidity of the Corporation's shares, and such other factors as
the Board in its discretion deems relevant.
(b) TERM OF OPTIONS: The term of each Option shall extend
for a period of twenty-four (24) months commencing with the
Option Date with respect to such Option, said term being
hereinafter called the "Purchase Period."
(c) PURCHASE ACCOUNT: Each Optionee shall notify the
Corporation, on such forms as shall be provided by the
Corporation, within seven (7) days following actual receipt by
the Optionee of such forms, of the number of shares which the
Optionee wishes to have the right to purchase as of the last day
of the Purchase Period (hereinafter referred to as the "Purchase
Date"), which election may be for either all or any part of the
shares subject to the Option (such shares, so elected, shall be
hereinafter called the "Elected Shares").
Although, as more fully provided hereinafter, on the
Purchase Date an Optionee may decline to purchase all or any part
of the Optionee's Elected Shares, such Optionee, in the event the
Optionee's Elected Shares are less than all of the shares subject
to the Option, may not purchase more than the Optionee's Elected
Shares on the Purchase Date.
Except as provided in subsection (i) of this Article V, each
Optionee shall authorize the Corporation and its Subsidiaries to
withhold from the Optionee's after tax compensation, beginning as
soon as practicable following the making of the election
described above as to Elected Shares and continuing throughout
the duration of the Option, amounts sufficient to accumulate over
such period (with allowances for interest as provided for herein)
the aggregate Purchase Price of the Optionee's Elected Shares.
Such withheld amounts may be used by the Corporation for general
corporate purposes, but the Corporation shall maintain a record
of each Optionee's funds as a "Purchase Account." Such funds so
accumulated within said Purchase Account may be withdrawn, paid
or applied toward the Purchase Price of Elected Shares only
pursuant to the provisions contained in this Plan.
(d) INTEREST PAYABLE ON THE PURCHASE ACCOUNT: Except as
provided in Article XI hereof, the Corporation shall credit to
Purchase Accounts simple interest at the rate of five percent
(5.0%) per annum, computed on a 365-day basis, on the amount
deducted from the Optionees' salary payments and contributed to
the Purchase Account annually. Such interest shall be credited
annually on a date determined by the Committee. The optionee is
responsible for all income taxes associated with the interest
credited to the optionee's Purchase Account.
(e) DATES ON WHICH OPTION SHALL BE EXERCISED: Except as
provided in subsections (h) and (i) of this Article V, each
Option which is exercised shall be exercised as of the Purchase
Date.
(f) MANNER OF EXERCISING OPTION: Except as provided in
subsections (h) and (i) of this Article V, each Optionee shall,
on such forms as shall be provided by the Corporation, at least
five (5) business days prior to the Purchase Date, notify the
Corporation of the Optionee's election either to: (i) exercise
the Option to purchase all or any part of the Elected Shares; or,
in lieu thereof, (ii) decline to so exercise the Option, which
election, in either event, shall be effective as of said Purchase
Date.
In the event the Optionee so exercises the Option, the
Optionee shall tender to the Corporation all funds then on
deposit in the Optionee's Purchase Account, including interest,
along with such other amounts as may be necessary to purchase all
or any part of the Optionee's Elected Shares. Any excess of
funds over the required purchase price shall be paid to the
Optionee and the Purchase Account closed.
In the event the Optionee declines to so exercise the
Option, all funds, including interest, then in the Optionee's
Purchase Account, shall be paid to said Optionee and the Purchase
Account closed.
Should the Optionee fail to deliver the notification form
referred to in this subsection (f), such failure shall be deemed
an election by said Optionee to decline to exercise the Option.
(g) TERMINATION OF OPTION: An Optionee may at any time on
or before the Purchase Date terminate the Option in its entirety
by written notice of such termination delivered in the manner set
forth in Article X hereof. Such termination shall become
effective upon receipt of such notice by the Corporation. Upon
such termination, all funds, including interest credited, then in
the Optionee's Purchase Account shall be paid to the Optionee and
the Optionee's Purchase Account closed, and all rights and
privileges of Optionee granted pursuant to this Plan and the
Option granted hereunder shall be terminated. Any interest
accrued but not credited to the Purchase Account will be
forfeited.
(h) TERMINATION OF EMPLOYMENT: In the event that an
Optionee's employment by the Corporation or a Subsidiary is
terminated other than by retirement with the consent of the
Corporation, medical disability (determined in accordance with
the Corporation's long term disability plan then in effect) or by
death, all rights and privileges of Optionee granted pursuant to
the Plan and of the Option granted hereunder shall terminate, and
all funds, including interest, then on deposit in the Optionee's
Purchase Account shall be paid to the Optionee and the Optionee's
Purchase Account closed. If any termination of employment is due
to retirement with the consent of the Corporation, the Optionee
shall have the right within thirty (30) days thereafter, but not
later than five (5) business days prior to the Purchase Date, to
exercise the Option to purchase all or any part of the Optionee's
Elected Shares. If the Optionee shall become medically disabled
or die while in the employment of the Corporation or any
Subsidiary of the Corporation during the term of the Option, the
Optionee's estate, personal representative, or beneficiary shall
have the right, at any time, within twelve (12) months from the
date of the Optionee's medical disability or death, but not later
than five (5) business days prior to the Purchase Date, to
exercise the employee's Option to purchase all or any part of the
Elected Shares. Options exercised pursuant to the terms of this
subsection (h) of this Article V may be exercised (during the
specified times) as to all or any part of the Elected Shares by
written notice delivered in the manner set forth in Article X
hereof and tendering with such notice payment of any or all
funds, including amounts credited to said Optionee's Purchase
Account and such other amounts as may be necessary to aggregate
the required purchase price, and shall be deemed exercised as of
the date such notice is delivered, except if such notice is
delivered less than ten (10) business days prior to the Purchase
Date, they shall be deemed exercised as of the Purchase Date.
Failure to deliver such notice and payment within the time
provided shall be deemed an election not to exercise the Option,
which shall terminate, and all funds, including interest, then in
the Optionee's Purchase Account shall be paid to the Optionee or
his estate and the Purchase Account closed.
Retirement of an Optionee at the Optionee's Normal
Retirement Date in accordance with the provisions of any
Retirement Plan adopted by the Corporation or by any Subsidiary
shall be deemed to be a retirement with the consent of the
Corporation. Whether any other terminations of employment
(either at an Optional Retirement Date in accordance with the
provision of any such Retirement Plan or otherwise) are to be
considered retirements with the consent of the Corporation and
whether authorized leaves of absence or absences on military or
government service or for other reasons shall constitute a
termination of employment for the purposes of the Plan, shall be
determined by the Committee, the determination of which shall be
final and conclusive. Employment by the Corporation or any
Subsidiary shall be deemed to be continuous and not to terminate
during any uninterrupted period in which an employee is in the
employment of the Corporation or any Subsidiary, but only if and
so long, in the case of employment by a Subsidiary, as employment
by such Subsidiary will, under the applicable provisions of the
Code as then in effect, result in the same tax treatment as would
be accorded if such Optionee were an employee of the Corporation.
(i) ADJUSTMENT OF OPTIONS; EXERCISABILITY UPON CERTAIN
EVENTS: In the event of reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger,
consolidation, offering of rights or any other change in the
structure of shares of Common Stock of the Corporation, the total
amount of shares on which options may be granted under the Plan
and options rights (both as to the number of shares and the
option price) shall be appropriately adjusted for any increase or
decrease in the number of outstanding shares of Common Stock;
provided, however, that any fractional shares resulting from any
such adjustment shall be eliminated.
In the event of (i) the adoption of a plan of merger or
consolidation of the Corporation with any other corporation as a
result of which the holders of the Common Stock of the
Corporation in the aggregate would receive less than 50% of the
voting capital stock of the surviving or resulting corporation,
(ii) the approval by the Board of Directors of an agreement
providing for the sale by the Corporation of a majority of the
stock of a significant subsidiary of the Corporation or
substantially all of the assets of the Corporation or of a
significant subsidiary of the Corporation, or (iii) 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, other than a person,
or group including a person, who beneficially owned, as of the
Option Date, more than 5% of the Corporation's securities in the
absence of a prior expression of approval of the Board of
Directors of the Corporation, then any option granted hereunder
shall become immediately exercisable as to the Optionee's Elected
Shares and shall remain exercisable, subject to all of the terms
hereof not inconsistent with this subsection (i) of this Article
V.
Anything contained herein to the contrary notwithstanding,
upon the dissolution, liquidation or merger or consolidation in
which the shareholders of the Corporation receive less than 50%
of the voting capital stock of the surviving or resulting
corporation, each option granted under the Plan shall terminate,
but the Optionee shall have the right, following the adoption of
a plan of dissolution or liquidation and in any event prior to
such dissolution, liquidation, merger or consolidation, to
exercise his option to purchase his Elected Shares, subject to
all of the other terms hereof not inconsistent with this
subsection (i) of this Article V.
The grant of an Option pursuant to this Plan shall not
affect in any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations, or changes of
its capital or business structure, or to merge or consolidate, or
to dissolve, liquidate or sell, or transfer all or any part of
the business or assets.
(j) ASSIGNABILITY: No Option granted hereunder shall be
assignable or transferable except by will or by the laws of
descent and distribution, and shall be exercisable, during the
lifetime of Optionee, only by said Optionee.
(k) RIGHTS AS A SHAREHOLDER: No Optionee shall have any
rights as a shareholder with respect to shares purchased pursuant
to the Options to be granted hereunder until full payment has
been made for such shares and a stock certificate for such shares
has been actually issued to said Optionee. No adjustment will be
made for dividends or other rights for which the record date is
prior to the date of such issuance.
(l) REGISTRATION: Each Option under the Plan shall be
granted on the condition that a registration statement under the
Securities Act of 1933, as amended, with respect to the Common
Stock subject to such Option has become effective and a copy of
the Prospectus has been delivered to the Optionee.
ARTICLE VI. TERM OF PLAN:
The term of said Plan shall be for a period commencing on
the Option Date, and ending on the Purchase Date.
ARTICLE VII. AMENDMENTS:
The Committee may, from time to time, alter, amend, suspend,
or discontinue the Plan at any time without notice, provided that
no Optionee's existing rights are adversely affected thereby;
provided further, upon any such amendment or modification, all
Optionees shall continue to have the same rights and privileges
as other Optionees (except as otherwise provided for in Article
IV hereof); and provided further, that no such amendment of the
Plan shall, except as provided in subsection (i) of Article V
hereof: (a) increase above one hundred thousand (100,000) the
total number of shares which may be offered; (b) change the
formula by which the price for which the Common Stock shall be
sold is determined; or (c) increase the maximum number of shares
which any Optionee may purchase.
ARTICLE VIII. APPLICATION OF FUNDS:
The proceeds received by the Corporation from the sale of
its Common Stock pursuant to Options granted under this Plan,
except as otherwise provided herein, will be used for general
corporate purposes.
ARTICLE IX. NO OBLIGATION TO PURCHASE SHARES:
The granting of an Option pursuant to this Plan shall impose
no obligation upon the Optionee to purchase any shares covered by
such Option.
ARTICLE X. NOTICES:
Any notice which the Corporation or Optionee may be required
or permitted to give to each other shall be in writing and shall
be deemed given when delivered personally or deposited in the
U.S. Mail, first class postage prepaid, addressed as follows:
Secretary, First Charter Corporation, 22 Union Street, North,
Concord, North Carolina 28026-0228, or as such other address as
the Corporation, by notice to the Optionee, may designate in
writing from time to time; to the Optionee, at the address shown
on the records of the Corporation, or at such other address as
the Optionee, by notice to the Corporation, may designate in
writing from time to time.
ARTICLE XI. CLOSING OF PURCHASE ACCOUNT:
In the event that under any provision hereof an Optionee's
Purchase Account is to be closed and any balance not applied to
the purchase of all or any part of such Optionee's Elected Shares
is to be paid to Optionee, such payment shall be made within
thirty (30) days following the date that the right to such
payment accrues and shall include interest payable up to such
date, after which no additional interest shall accrue.
ARTICLE XII. THE RIGHT OF THE COMPANY TO TERMINATE EMPLOYMENT:
Nothing contained in the Plan or in any option granted
pursuant to the Plan shall confer upon any Optionee any right to
be continued in the employment of the Company or one of its
Subsidiaries, or shall interfere in any way with the right of the
Company or any of its Subsidiaries, as the case may be, to
terminate his employment at any time for any reason.
ARTICLE XIII. EFFECTIVENESS OF THE PLAN:
The Plan shall become effective only if:
(a) The Plan shall have been adopted by the Board of
Directors of the Corporation; and
(b) The Plan shall have been approved by the affirmative
vote of the holders of at least a majority of shares of Common
Stock voted at the shareholders' meeting at which the Plan is
considered.
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."
