REGISTRATION STATEMENT NO. 333-_____
Filed April 2, 1998
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST FINANCIAL HOLDINGS, INC.
(Exact name of registrant as
specified in its charter)
Delaware 57-0866076
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
2400 Mall Drive, Suite 100
Charleston, South Carolina 29418
(803) 724-0800
(Address of principal executive
offices)
First Financial Holdings, Inc.
1997 Stock Option and Incentive Plan
(Full title of the Plan)
A. Thomas Hood With copies to:
President and Chief Executive Eric S. Kracov, Esquire
Officer Breyer & Aguggia
First Financial Holdings, Inc. 1300 I Street, N.W.
2400 Mall Drive, Suite 100 Suite 470 East
Charleston, South Carolina Washington, D.C. 20005
29418 (202) 737-7900
(803) 724-0800
Name, address and telephone
number of agent for service
Page 1 of 7 Pages
Index to Exhibits Appears on Page 4.
<PAGE>
Calculation of Registration Fee
Proposed Proposed
Title of Amount to Maximum Maximum Amount of
Securities be Offering Aggregate Registration
to be Registered Price Per Offering Fee
Registered (2) Share(1) Price(1)
Common 600,000 $25.94 $15,564,000 $4,591.38
Stock, $.01
par value
(1) Estimated solely for the purpose of calculating the amount
of the registration fee. Pursuant to Rule 457(c) under the
Securities Act of 1933, as amended (the "Securities Act"),
the price per share is estimated to be $25.94, based upon
the average of the high and low trading prices of the
common stock, $.01 par value per share (the "Common
Stock"), of First Financial Holdings, Inc. (the
"Registrant"), as reported on the Nasdaq Stock Market on
April 1, 1998.
(2) 600,000 shares (adjusted for 2-for-1 stock split paid
3/27/98) are being registered for issuance under the terms
of the First Financial Holdings, Inc. 1997 Stock Option and
Incentive Plan (the foregoing plan is referred to herein as
the "Plan"); together with an indeterminate number of
shares reserved for issuance pursuant to the Plans as a
result of any future stock split, stock dividend or similar
adjustment of the outstanding Common Stock.
This Registration Statement shall become effective
automatically upon the date of filing in accordance with Section
8(a) of the Securities Act of 1933, as amended, and 17 C.F.R.
Section 230.462.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed with the Commission are
incorporated in this Registration Statement by reference:
(1) the Company's Annual Report on Form 10-K (File No. 0-
17122), for the year ended September 30, 1997;
(2) the Company's announcement of a two-for-one stock
split on Form 8-K (File No. 0-17122) filed March 3, 1998;
(3) the Company's Quarterly Report on Form 10-Q (File No.
0-17122), for the quarter ended December 31, 1997;
All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Exchange Act, after the date hereof
and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or
which deregisters all securities covered hereby then remaining
unsold, shall also be deemed to be incorporated by reference in
this Registration Statement and to be a part hereof commencing on
the respective dates on which such documents are filed.
Any statement contained in this Registration Statement, or
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 to the extent that a
statement contained herein, or in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
Not Applicable
Item 5. Interests of Named Experts and Counsel
Not Applicable
Item 6. Indemnification of Directors and Officers
Article XV of the Registrant's Certificate of Incorporation
provides for indemnification of directors and officers of the
Registrant against any and all liabilities, judgments, fines and
reasonable settlements, costs, expenses and attorneys' fees
incurred in any actual, threatened or potential proceeding,
except to the extent that such indemnification is limited by
Delaware law and such law cannot be varied by contract or bylaw.
Article XV also provides for the authority to purchase insurance
with respect thereto.
Section 145 of the General Corporation Law of the State of
Delaware authorizes a corporation's board of directors to grant
indemnity under certain circumstances to directors and officers,
when made, or threatened to be made, parties to certain
proceedings by reason of such status with the corporation,
against judgments, fines, settlements and expenses, including
attorneys' fees. In addition, under certain circumstances such
persons may be indemnified against expenses actually and
reasonably incurred in defense of a proceeding by or on behalf of
the corporation. Similarly, the corporation, under certain
circumstances, is authorized to indemnify directors and officers
of other corporations or enterprises who are serving as such at
the request of the corporation, when such persons are made, or
threatened to be made, parties to certain proceedings by reason
of such status, against judgments, fines, settlements and
expenses, including attorneys' fees; and under certain
circumstances, such persons may be indemnified against expenses
actually and reasonably incurred in connection with the defense
or settlement of a proceeding by or in the right of such other
corporation or enterprise. Indemnification is permitted where
such person (i) was acting in good faith, (ii) was acting in a
manner reasonably believed to be in or not opposed to the best
interests of the corporation or other corporation or enterprise,
as appropriate, (iii) with respect to criminal proceeding, had no
reasonable cause to believe his conduct was unlawful, and (iv)
was not adjudged to be liable to the corporation or other
corporation or enterprise (unless the court where the proceeding
was brought determines that such person is fairly and reasonably
entitled to indemnity).
Unless ordered by a court, indemnification may be made only
following a determination that such indemnification is
permissible because the person being indemnified has met the
requisite standard of conduct. Such determination may be made
(i) by the corporation's board of directors by a majority vote of
a quorum consisting of directors not at the time parties to such
proceeding; or (ii) if such a quorum cannot be obtained or the
quorum so directs, then by independent legal counsel in a written
opinion; or (iii) by the stockholders.
Section 145 also permits expenses incurred by directors and
officers in defending a proceeding to be paid by the corporation
in advance of the final disposition of such proceedings upon the
receipt of an undertaking by the director or officer to repay
such amount if it is ultimately determined that he is not
entitled to be indemnified by the corporation against such
expenses.
Item 7. Exemption From Registration Claimed
Not Applicable
Item 8. Exhibits
The following exhibits are filed with or incorporated by
reference into this Registration Statement on Form S-8:
No. Exhibit
5 Opinion of Breyer & Aguggia
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Breyer & Aguggia (see Exhibit 5)
24 Power of attorney (see signature pages)
99.1 First Financial Holdings, Inc. 1997 Stock Option
and Incentive Plan
Item 9. Undertakings
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, (ii) to reflect in the prospectus
any facts or events arising after the effective date of the
Registration Statement (or 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, and (iii) to include any material
information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any
material change in such information in the Registration
Statement; provided, however, that clauses (i) and (ii) do not
apply if the information required to be included in a post-
effective amendment by those clauses is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in
the Registration Statement.
2. That, for the purposes of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed 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.
4. That, for the purposes of determining any liability
under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and that offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
5. 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 Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against liabilities (other than
the payment by 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 questions
whether such indemnification by it is against public policy
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
First Financial Holdings, Inc. 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 Charleston, and State of South
Carolina the 30th day of March 1998.
FIRST FINANCIAL HOLDINGS, INC.
By: /s/ A. Thomas Hood
A. Thomas Hood
President, Chief Executive
Officer and Director
(Principal Executive Officer)
POWER OF ATTORNEY
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. Each
person whose signature appears below hereby makes, constitutes
and appoints A. Thomas Hood his true and lawful attorney, with
full power to sign for such person and in such person's name and
capacity indicated below, and with full power of substitution any
and all amendments to this Registration Statement, hereby
ratifying and confirming such person's signature as it may be
signed by said attorney to any and all amendments.
By: /s/ A. Thomas Hood Date: March 30, 1998
A. Thomas Hood
President, Chief Executive
Officer and
Director (Principal
Executive Officer)
By: /s/ Susan E. Baham Date: March 30, 1998
Susan E. Baham
Senior Vice President and
Chief Financial
Officer (Principal Financial
and Accounting Officer)
By: /s/ D. Van Smith Date: March 30, 1998
D. Van Smith
Chairman
By: /s/ A. L. Hutchinson, Jr. Date: March 30, 1998
A. L. Hutchinson, Jr.
Vice Chairman
By:
Gary C. Banks, Jr.
Director
By:
Paula Harper Bethea
Director
By: /s/ Paul G. Campbell, Jr. Date: March 30, 1998
Paul G. Campbell, Jr.
Director
By: /s/ James C. Murray Date: March 30, 1998
James C. Murray
Director
By:
D. Kent Sharples
Director
By: /s/ Thomas E. Thornhill Date: March 30, 1998
Thomas E. Thornhill
Director
<PAGE>
Exhibit 5
Opinion of Breyer & Aguggia
<PAGE>
March 27, 1998
Board of Directors
First Financial Holdings, Inc.
2400 Mall Drive, Suite 100
Charleston, South Carolina 29418
Dear Board Members:
We have acted as special counsel to First Financial
Holdings, Inc., a Delaware corporation (the "Company"), in
connection with the preparation of the Registration Statement on
Form S-8 filed with the Securities and Exchange Commission
("Registration Statement") under the Securities Act of 1933, as
amended, relating to shares of common stock, par value $.01 per
share (the "Common Stock") of the Company which may be issued
pursuant to the terms of the Company's 1997 Stock Option and
Incentive Plan (the "Plan"), all as more fully described in the
Registration Statement. You have requested the opinion of this
firm with respect to certain legal aspects of the proposed
offering.
We have examined such documents, records and matters of law
as we have deemed necessary for purposes of this opinion and
based thereon, we are of the opinion that the Common Stock when
issued pursuant to and in accordance with the terms of the Plan
will be duly and validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement on Form S-8.
Sincerely,
BREYER & AGUGGIA
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
First Financial Holdings, Inc.
Charleston, South Carolina
We consent to the use of our report dated October 24, 1997,
relating to the audit of First Financial Holdings, Inc. and
subsidiaries as of September 30, 1997 and 1996, and for each of
the years in the three-year period ended September 30, 1997,
which report appears in the September 30, 1997, annual report on
Form 10-K of First Financial Holdings, Inc. and subsidiaries,
incorporated by reference in the registration statement on Form
S-8 of First Financial Holdings, Inc., dated March 27, 1998, to
register shares of common stock which will be issued pursuant to
the First Financial Holdings, Inc. 1997 Stock Option and
Incentive Plan.
KPMG PEAT MARWICK LLP
Greenville, South Carolina
March 27, 1998
<PAGE>
Exhibit 23.2
Consent of Breyer & Aguggia (see Exhibit 5)
<PAGE>
Exhibit 24
Power of Attorney (see signature page)
<PAGE>
Exhibit 99.1
First Financial Holdings, Inc.
1997 Stock Option and Incentive Plan
<PAGE>
FIRST FINANCIAL HOLDINGS, INC.
1997 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. PURPOSE
The First Financial Holdings, Inc. 1997 Stock Option and
Incentive Plan (the "Plan") is hereby established to foster and
promote the long-term success of First Financial Holdings, Inc.
(the "Corporation") and its shareholders by providing officers
and employees of the Corporation with an equity interest in the
Corporation. The Plan will assist the Corporation in attracting
and retaining the highest quality of experienced persons as
officers and employees and in aligning the interests of such
persons more closely with the interests of the Corporation's
shareholders by encouraging such parties to maintain an equity
interest in the Corporation.
SECTION 2. DEFINITIONS
For purposes of this Plan, the capitalized terms set forth
below shall have the following meanings:
BOARD means the Board of Directors of the Corporation.
CHANGE IN CONTROL shall mean an event deemed to occur if and
when (a) an offeror other than the Corporation purchases shares
of the stock of the Corporation pursuant to a tender or exchange
offer for such shares, (b) any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes
the beneficial owner, directly or indirectly, of securities of
the Corporation representing twenty-five percent (25%) or more of
the combined voting power of the Corporation's then outstanding
securities, (c) the membership of the Board changes as the result
of a contested election, such that individuals who were directors
at the beginning of any twenty-four (24) month period (whether
commencing before or after the date of adoption of this Plan) do
not constitute a majority of the Board at the end of such period,
or (d) shareholders of the Corporation approve a merger,
consolidation, sale or disposition of all or substantially all of
the Corporation's assets, or a plan of partial or complete
liquidation. If any of the events enumerated in clauses (a) -
(d) occur, the Board shall determine the effective date of the
Change in Control resulting therefrom, for purposes of the Plan.
CODE means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated thereunder.
CORPORATION means First Financial Holdings, Inc., a Delaware
corporation.
DISABILITY means any physical or mental injury or disease of
a permanent nature which renders a Participant incapable of
meeting the requirements of the employment or service performed
by such Participant immediately prior to the commencement of such
disability. The determination of whether a Participant is
disabled shall be made by the Board in its sole and absolute
discretion.
EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations
promulgated thereunder.
FAIR MARKET VALUE shall mean, as of any date, the closing
price of the Corporation s Common Stock on the Nasdaq National
Market System. If the Stock is not traded on a national
securities exchange or quoted on the Nasdaq Stock Market and
there are not at least two brokerage companies reporting a bid
price per share on such date, then the Fair Market Value shall be
that value determined in good faith by the Board in such manner
as it deems appropriate.
INCENTIVE STOCK OPTION means an option to purchase shares of
Stock granted to a Participant under the Plan which is intended
to meet the requirements of Section 422 of the Code.
NON-QUALIFIED STOCK OPTION means an option to purchase
shares of Stock granted to a Participant under the Plan which is
not intended to be an Incentive Stock Option.
OPTION means an Incentive Stock Option or a Non-Qualified
Stock Option.
PARTICIPANT means an officer or employee of the Corporation
or its subsidiaries selected by the Board to receive an Option
under the Plan.
PLAN means this First Financial Holdings, Inc. 1997 Stock
Option and Incentive Plan.
STOCK means the common stock, $0.01 par value, of the
Corporation.
TERMINATION FOR CAUSE shall mean because of a Participant's
personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or
material breach of any provision of any employment agreement
between the Corporation and/or any subsidiary of the Corporation
and a Participant.
SECTION 3. ADMINISTRATION
(a) The Plan shall be administered by the Board (or, by a
committee of outside directors designated by the Board that
complies with the requirements of Rule 16b-3 under the Exchange
Act). Among other things, the Board shall have authority,
subject to the terms of the Plan, to grant Options, to determine
the individuals to whom and the time or times at which Options
may be granted, to determine whether such Options are to be
Incentive Options or Non-Qualified Stock Options (subject to the
requirements of the Code), to determine the terms and conditions
of any Option granted hereunder, and the exercise price thereof.
(b) Subject to the other provisions of the Plan, the Board
shall have authority to adopt, amend, alter and repeal such
administrative rules, guidelines and practices governing the
options of the Plan as it shall from time to time consider
advisable, to interpret the provisions of the Plan and any Option
and to decide all disputes arising in connection with the Plan.
The Board may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any option
agreement in the manner and to the extent it shall deem
appropriate to carry the Plan into effect, in its sole and
absolute discretion. The Board's decision and interpretations
shall be final and binding. Any action of the Board with respect
to the administration of the Plan shall be taken pursuant to a
majority vote or by the unanimous written consent of its members.
SECTION 4. ELIGIBILITY AND PARTICIPATION; LIMITATIONS ON
AWARDS
Officers and employees of the Corporation and its
subsidiaries shall be eligible to participate in the Plan. The
Participants under the Plan shall be selected from time to time
by the Board, in its sole discretion, from among those eligible,
and the Board shall determine, in its sole discretion, the
numbers of shares to be covered by the Option or Options granted
to each Participant. Options intended to qualify as Incentive
Stock Options shall be granted only to persons who are eligible
to receive such options under Section 422 of the Code.
SECTION 5. SHARES OF STOCK AVAILABLE FOR OPTIONS
(a) The maximum number of shares of Stock which may be
issued and purchased pursuant to Options granted under the Plan
is 300,000, subject to the adjustments as provided in Section 5
and Section 9, to the extent applicable. If an Option granted
under this Plan expires or terminates before exercise or is
forfeited for any reason, the shares of Stock subject to such
Option, to the extent of such expiration, termination or
forfeiture, shall again be available for subsequent Option grant
under the Plan. Shares of Stock issued under the Plan may
consist in whole or in part of authorized but unissued shares or
treasury shares.
(b) In the event that the Board determines, in its sole
discretion, that any stock dividend, stock split, reverse stock
split or combination, extraordinary cash dividend, creation of a
class of equity securities, recapitalization, reclassification,
reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, or other similar transaction
affects the Stock such that an adjustment is required in order to
preserve the benefits or potential benefits intended to be
granted or made available under the Plan to Participants, the
Board shall have the right to proportionately and appropriately
adjust equitably any or all of (i) the maximum number and kind of
shares of Stock in respect of which Options may be granted under
the Plan to Participants, (ii) the number and kind of shares of
Stock subject to outstanding Options held by Participants, and
(iii) the exercise price with respect to any Options held by
Participants, without changing the aggregate purchase price as to
which such Options remain exercisable, provided that no
adjustment shall be made pursuant to this Section if such
adjustment would cause the Plan to fail to comply with Section
422 of the Code with regard to any Incentive Stock Options
granted hereunder. No fractional Shares shall be issued on
account of any such adjustment.
(c) Any adjustments under this Section will be made by the
Board, whose determination as to what adjustments, if any, will
be made and the extent thereof will be final, binding and
conclusive.
SECTION 6. NON-QUALIFIED STOCK OPTIONS
The Board may, from time to time, grant Non-Qualified Stock
Options to Participants upon such terms and conditions as the
Board may determine. Non-Qualified Stock Options granted under
this Plan are subject to the following terms and conditions:
(a) Price. The purchase price per share of Stock
deliverable upon the exercise of each Non-Qualified Stock Option
shall be determined by the Board on the date the option is
granted. Such purchase price shall not be less than one hundred
percent (100%) of the Closing Fair Market Value of the Stock on
the date of grant. Shares may be purchased only upon full
payment of the purchase price. Payment of the purchase price may
be made, in whole or in part, through the surrender of shares of
the Stock at the Fair Market Value of such shares on the date of
surrender or through a "cashless exercise" involving a stock
brokerage firm.
(b) Terms of Options. The term during which each Non-
Qualified Stock Option may be exercised shall be determined by
the Board, but in no event shall a Non-Qualified Stock Option be
exercisable in whole or in part more than (10) years from the
date of grant. Except as provided herein, no Non-Qualified Stock
Option granted under this Plan is transferable except by will or
the laws of descent and distribution. The Board shall have
discretionary authority to permit the transfer of any Non-
Qualified Stock Option to members of a Participant's immediate
family, including trusts for the benefit of such family members
and partnerships in which such family members are the only
partners; provided, however, that a transferred Non-Qualified
Stock Option may be exercised by the transferee on any date only
to the extent that the Participant would have been entitled to
exercise the Non-Qualified Stock Option on such date had the Non-
Qualified Stock Option not been transferred. Any transferred
Non-Qualified Stock Option shall remain subject to the terms and
conditions of the Participant's stock option agreement.
(c) Termination of Service. Unless otherwise determined by
the Board, upon the termination of a Participant's service as an
employee for any reason other than Disability, death or
Termination for Cause, the Participant's Non-Qualified Stock
Options shall be exercisable only as to those shares which were
immediately exercisable by the Participant at the date of
termination and only for a period of one year following
termination. Notwithstanding any provision set forth herein nor
contained in any Agreement relating to the award of an Option, in
the event of Termination for Cause, all rights under the
Participant's Non-Qualified Stock Options shall expire upon
termination. In the event of death or termination of service as
a result of Disability of any Participant, all Non-Qualified
Stock Options held by the Participant, whether or not exercisable
at such time, shall be exercisable by the Participant or his
legal representatives or beneficiaries of the Participant for two
years or such longer period as determined by the Board following
the date of the Participant s death or termination of service due
to Disability. In no event shall the period extend beyond the
expiration of the Non-Qualified Stock Option term.
SECTION 7. INCENTIVE STOCK OPTIONS
The Board may, from time to time, grant Incentive Stock
Options to eligible officers and employees. Incentive Stock
Options granted pursuant to the Plan shall be subject to the
following terms and conditions:
(a) Price. The purchase price per share of Stock
deliverable upon the exercise of each Incentive Stock Option
shall not be less than one hundred percent (100%) of the Closing
Fair Market Value of the Stock on the date of grant. However, if
a Participant owns (or, under Section 422(d) of the Code, is
deemed to own) stock possessing more than ten percent (10%) of
the total combined voting power of all classes of Stock, the
purchase price per share of Stock deliverable upon the exercise
of each Incentive Stock Option shall not be less than one hundred
ten percent (110%) of the Fair Market Value of the Stock on the
date of grant. Shares may be purchased only upon payment of the
full purchase price. Payment of the purchase price may be made,
in whole or in part, through the surrender of shares of the Stock
at the Fair Market Value of such shares on the date of surrender
or through a "cashless exercise" involving a stock brokerage
firm.
(b) Incentive Stock Options may be granted to any eligible
employee in such amounts as determined by the Board. In the case
of an option intended to qualify as an Incentive Stock Option,
the aggregate Fair Market Value (determined as of the time the
option is granted) of the Stock with respect to which Incentive
Stock Options granted are exercisable for the first time by the
Participant during any calendar year shall not exceed $100,000.
The provisions of this Section 7(b) shall be construed and
applied in accordance with Section 422(d) of the Code and the
regulations, if any, promulgated thereunder. To the extent an
award is in excess of such limit, it shall be deemed a Non-
Qualified Stock Option. The Board shall have discretion to
redesignate options granted as Incentive Stock Options as Non-
Qualified Stock Options.
(c) Terms of Options. The term during which each Incentive
Stock Option may be exercised shall be determined by the Board,
but in no event shall an Incentive Stock Option be exercisable in
whole or in part more than ten (10) years from the date of grant.
If at the time an Incentive Stock Option is granted to an
employee, the employee owns Stock representing more than ten
percent (10%) of the total combined voting power of the
Corporation (or, under Section 422(d) of the Code, is deemed to
own Stock representing more than ten percent (10%) of the total
combined voting power of all such classes of Stock, by reason of
the ownership of such classes of Stock, directly or indirectly,
by or for any brother, sister, spouse, ancestor or lineal
descendent of such employee, or by or for any corporation,
partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), the Incentive Stock Option
granted to such employee shall not be exercisable after the
expiration of five years from the date of grant. No Incentive
Stock Option granted under this Plan is transferable except by
will or the laws of descent and distribution.
(d) Termination of Employment. Upon the termination of a
Participant's service for any reason other than Disability, death
or Termination for Cause, the Participant's Incentive Stock
Options which are then exercisable at the date of termination may
only be exercised by the Participant for a period of three months
following termination, after which time they shall be void.
Notwithstanding any provisions set forth herein nor contained in
any Agreement relating to an award of an Option, in the event of
Termination for Cause, all rights under the Participant's
Incentive Stock Options shall expire immediately upon
termination.
(e) Unless otherwise determined by the Board, in the event
of death or termination of service as a result of Disability of
any Participant, all Incentive Stock Options held by such
Participant, whether or not exercisable at such time, shall be
exercisable by the Participant or the Participant's legal
representatives or the beneficiaries of the Participant for one
year following the date of the Participant's death or termination
of employment as a result of Disability. In no event shall the
exercise period extend beyond the expiration of the Incentive
Stock Option term.
(f) Compliance with Code. The options granted under this
Section 7 of the Plan are intended to qualify as incentive stock
options within the meaning of Section 422 of the Code, but the
Corporation makes no warranty as to the qualification of any
option as an incentive stock option within the meaning of Section
422 of the Code. A Participant shall notify the Board in writing
in the event that he disposes of Stock acquired upon exercise of
an Incentive Stock Option within the two-year period following
the date the Incentive Stock Option was granted or within one-
year following the date he received Stock upon the exercise of an
Incentive Stock Option and shall comply with any other
requirements imposed by the Corporation in order to enable the
Corporation to secure the related income tax deduction to which
it will be entitled in such event under the Code.
SECTION 8. EXTENSION
The Board may, in its sole discretion, extend the dates
during which all or any particular Option or Options granted
under the Plan may be exercised; provided, however, that no such
extension shall be permitted without the consent of the
Participant if it would cause Incentive Stock Options issued
under the Plan to fail to comply with Section 422 of the Code.
SECTION 9. GENERAL PROVISIONS APPLICABLE TO OPTIONS
(a) Each Option under the Plan shall be evidenced by a
writing delivered to the Participant specifying the terms and
conditions thereof and containing such other terms and conditions
not inconsistent with the provisions of the Plan as the Board
considers necessary or advisable to achieve the purposes of the
Plan or comply with applicable tax and regulatory laws and
accounting principles.
(b) Each Option may be granted alone, in addition to or in
relation to any other Option. The terms of each Option need not
be identical, and the Board need not treat Participants
uniformly. Except as otherwise provided by the Plan or a
particular Option, any determination with respect to an Option
may be made by the Board at the time of grant or at any time
thereafter.
(c) In the event of a Change in Control, all then
outstanding Options shall become one hundred percent vested and
exercisable as of the effective date of the Change in Control.
If, in connection with or as a consequence of a Change in
Control, the Corporation is merged into or consolidated with
another corporation, if the Corporation becomes a subsidiary of
another corporation or if the Corporation sells or otherwise
disposes of substantially all of its assets to another
corporation, then unless provisions are made in connection with
such transactions for the continuance of the Plan and/or the
assumption or substitution of then outstanding Options with new
options covering the stock of the successor corporation, or
parent or subsidiary thereof, with appropriate adjustments as to
the number and kind of shares and prices, such Options shall be
canceled as of the effective date of the merger, consolidation,
or sale and the Participant shall be paid in cash an amount equal
to the difference between the Fair Market Value of the Stock
subject to the Options on the effective date of such corporate
event and the exercise price of the Options. Notwithstanding
anything in this Section 9(c) or any Option agreement to the
contrary, in the event that the consummation of a Change in
Control is contingent on using pooling of interests accounting
methodology, the Board may, in its discretion, take any action
necessary to preserve the use of pooling of interests accounting.
(d) The Corporation shall be entitled to withhold (or
secure payment from the Participant in lieu of withholding) the
amount of any withholding or other tax required by law to be
withheld or paid by the Corporation with respect to any Options
exercised under this Plan, and the Corporation may defer issuance
of Stock hereunder until and unless indemnified to its
satisfaction against any liability for any such tax. The amount
of such withholding or tax payment shall be determined by the
Board or its delegate and shall be payable by the Participant at
such time as the Board determines. Such withholding obligation
may be satisfied by, without limitation, the payment of cash by
the Participant to the Corporation, the tendering of previously
acquired shares of Stock of the Participant or the withholding,
at the appropriate time, of shares of Stock otherwise issuable to
the Participant, in a number sufficient, based upon the Fair
Market Value of such Stock, to satisfy such tax withholding
requirements. The Board shall be authorized, in its sole
discretion, to establish such rules and procedures relating to
any such withholding methods as it deems necessary or
appropriate, including, without limitation, rules and procedures
relating to elections by Participants who are subject to the
provisions of Section 16 of the Exchange Act.
(e) Subject to the terms of the Plan, the Board may at any
time, and from time to time, amend, modify or terminate the Plan
or any outstanding Option held by a Participant, including
substituting therefor another Option of the same or a different
type or changing the date of exercise or realization, provided
that the Participant s consent to each action shall be required
unless the Board determines that the action, taking into account
any related action, would not materially and adversely affect the
Participant.
SECTION 10. MISCELLANEOUS
(a) No person shall have any claim or right to be granted
an Option, and the grant of an Option shall not be construed as
giving a Participant the right to continued employment or service
on the Corporation s Board. The Corporation expressly reserves
the right at any time to dismiss a Participant free from any
liability or claim under the Plan, except as expressly provided
in the Plan or the applicable Option.
(b) Nothing contained in the Plan shall prevent the
Corporation from adopting other or additional compensation
arrangements.
(c) Subject to the provisions of the applicable Option, no
Participant shall have any rights as a shareholder (including,
without limitation, any rights to receive dividends, or non cash
distributions with respect to such shares) with respect to any
shares of Stock to be distributed under the Plan until he or she
becomes the holder thereof.
(d) Notwithstanding anything to the contrary expressed in
this Plan, any provisions hereof that vary from or conflict with
any applicable Federal or State securities laws (including any
regulations promulgated thereunder) shall be deemed to be
modified to conform to and comply with such laws.
(e) No member of the Board shall be liable for any action
or determination taken or granted in good faith with respect to
this Plan nor shall any member of the Board be liable for any
agreement issued pursuant to this Plan or any grants under it.
Each member of the Board shall be indemnified by the Corporation
against any losses incurred in such administration of the Plan,
unless his action constitutes serious and willful misconduct.
(f) The Plan shall be effective upon approval by the
Corporation's shareholders at the 1998 annual meeting of
shareholders. The Plan will be so approved if at such meeting a
quorum is present and the votes of the holders of a majority of
the securities of the Corporation present or represented by proxy
at the meeting and entitled to vote on such matter shall be cast
in favor of its approval.
(g) The Board may amend, suspend or terminate the Plan or
any portion thereof at any time, provided that no amendment
shall be granted without shareholder approval if such approval is
necessary to comply with any applicable tax laws or regulatory
requirement.
(h) Options may not be granted under the Plan after the
tenth anniversary of the effective date of the Plan, but then
outstanding Options may extend beyond such date.
(i) To the extent that State laws shall not have been
preempted by any laws of the United States, the Plan shall be
construed, regulated, interpreted and administered according to
the other laws of the State of South Carolina.
Board Approved: October 23, 1997
Approved by Shareholders January 28, 1998
