Registration Statement No. - 33-95562
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
________________
BEACH FIRST NATIONAL BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-1030117
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1550 North Oak Street
Myrtle Beach, South Carolina 29577
(Address of Principal executive offices)
Beach First National Bancshares, Inc. 1997 Stock Option Plan
(Full Title of the Plan)
Raymond E. Cleary, III, President and Chief Executive Officer
Beach First National Bancshares, Inc.
1550 North Oak Street
Myrtle Beach, South Carolina 29577
(803) 626-2265
(Name, address, and telephone number of agent for service)
________________________________
Copies Requested to:
Neil E. Grayson, Esq.
Nelson Mullins Riley & Scarborough, L.L.P.
999 Peachtree Street, N.E., Suite 1400
Atlanta, Georgia 30309
(404) 817-6000
(404) 817-6050 (Fax)
________________________________
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
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<CAPTION>
Title of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be to be Offering Aggregate Registration
Registered Registered Price Per Share (1) Offering Price (1) Fee
<S> <C> <C> <C> <C>
Common Stock, par value 110,000
$1.00 per share Shares $9.12 $1,003,200.00 $304.00
- -----------------------------------------------------------------------------------------------------------------------------------
(1) This estimation is solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and (h) and is based
upon the book value of $9.12 per share as of December 31, 1997. There is no active trading market for the Common Stock and the
$9.12 per share price is not indicative of present value.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed below are hereby incorporated by reference into
this registration statement ("Registration Statement"), and all documents
subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents:
(a) the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996 as filed with the Securities and
Exchange Commission;
(b) all other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the
Form 10-KSB referred to in (a) above; and
(c) the description of the Company's Common Stock contained in the
section titled "Description of Capital Stock of the Company" on
pages 38-43 of the Company's Registration Statement on Form S-1
(No. 33-95562) filed with the Securities and Exchange
Commission.
Item 4. Description of Securities.
No response is required to this item.
Item 5. Interests of Named Experts and Counsel.
No response is required to this item.
Item 6. Indemnification of Directors and Officers.
The Bylaws of the Company require the Company to indemnify any person
who was, is, or is threatened to be made a defendant or respondent in any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, of investigative, by reason of service by such person
as a director of the Company or the Bank or any other corporation which he
served as such at the request of the Company. Except as noted in the next
paragraph, directors are entitled to be indemnified against judgments,
penalties, fines, settlements, and reasonable expenses actually incurred by the
director in connection with the proceeding. Directors are also entitled to
have the Company advance any such expenses prior to final disposition of the
proceeding, upon delivery of a written affirmation by the director of his good
faith belief that the standard of conduct necessary for indemnification has
been met and a written undertaking to repay the amounts advanced if it is
ultimately determined that the standard of conduct has not been met.
Under the Bylaws, indemnification will be disallowed if it is
established that the director (i) appropriated, in violation of his duties, any
business opportunity of the Company, (ii) engaged in willful misconduct or a
knowing violation of law, (iii) permitted any unlawful distribution, or (iv)
derived an improper personal benefit. In addition to the Bylaws of the Company,
Section 33-8-520 of the South Carolina Business Corporation Act of 1988 (the
"Corporation Act") requires that "a corporation 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."
The Corporation Act also provides that upon application of a director a court
may order indemnification if it determines that the director is entitled to
such indemnification under the applicable standard of the Corporation Act.
The Board of Directors also has the authority to extend to officers,
employees, and agents the same indemnification rights held by directors,
subject to all of the accompanying conditions and obligations. The Board of
Directors has extended or intends to extend indemnification rights to all of
its executive officers.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed with this Registration Statement:
Exhibit
Number Description of Exhibit
4.1 - Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1
of the Company's Registration Statement
on Form S-1 (File No. 33-95562)).
4.2 - Bylaws of the Company (incorporated by
reference to Exhibit 3.2 of the Company's
Registration Statement on Form S-1
(File No. 33-95562)).
4.3 - Beach First National Bancshares, Inc. 1997
Stock Option Plan.
5.1 - Legal opinion of Nelson, Mullins, Riley &
Scarborough, L.L.P.
23.1 - Consent of Nelson, Mullins, Riley &
Scarborough, L.L.P. (contained in their
opinion filed as Exhibit 5.1).
24 - Power of Attorney (contained on the signature
pages of this Registration Statement).
Item 9. Undertakings.
The Company hereby undertakes that it will:
(a) File, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental
change in the information in the registration state-
ment. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the
total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent
change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) Include any additional or changed material information
on the plan of distribution;
provided, however, that the undertakings set forth in para-
graphs (i) and (ii) above do not apply if 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 Company pursuant to the
Exchange Act that are incorporated by reference in this
Registration Statement;
(b) For determining liability under the Securities Act, treat
each such post-effective amendment as a new registration
statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide offering;
and
(c) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company 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.
<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 Myrtle Beach, State of South Carolina on this 2nd
day of January, 1998.
BEACH FIRST NATIONAL BANCSHARES, INC.
By: /s/ William Gary Horn
William Gary Horn
President
Each person whose signature appears below constitutes and appoints
William Gary Horn, for himself or herself in name, place and stead, in any and
all capacities, as his or her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, to sign any and all amendments to
this Registration Statement, and to file the same with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that the attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons, in the
capacities indicated, on January 2, 1998.
Signature Title
Director
Michael Bert Anderson
/s/ Orvis Barlett Buie Director
Orvis Barlett Buie
Director
Raymond E. Cleary, III
Director
Jack L. Green, Jr.
/s/ Michael D. Harrington Director
Michael D. Harrington
/s/ William Gary Horn Director
William Gary Horn
Director
William H. Howard
/s/ Joe N. Jarrett, Jr. Director
Joe N. Jarrett, Jr.
/s/ Richard E. Lester Director
Richard E. Lester
Director
Diane W. Sammons
/s/ Rick H. Seagroves Director
Rick H. Seagroves
/s/ Don J. Smith Director
Don J. Smith
/s/ Samuel Robert Spann, Jr. Director
Samuel Robert Spann, Jr.
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
Number Exhibit Page No.
4.1 - Articles of Incorporation of the Company
(incorporated by reference to Exhibit
3.1 of the Company's Registration
Statement on Form S-1 (File No. 33-95562)).
4.2 - Bylaws of the Company (incorporated by
reference to Exhibit 3.2 of the Company's
Registration Statement on Form S-1
(File No. 33-95562)).
4.3 - Beach First National Bancshares, Inc.
1997 Stock Option Plan.
5.1 - Legal opinion of Nelson, Mullins, Riley &
Scarborough, L.L.P.
23.1 - Consent of Nelson, Mullins, Riley &
Scarborough, L.L.P. (contained in their
opinion filed as Exhibit 5.1)
24 - Power of Attorney (contained on the
signature pages of this Registration
Statement).
EXHIBIT 4.3
BEACH FIRST NATIONAL BANCSHARES, INC.
1997 STOCK OPTION PLAN
<PAGE>
BEACH FIRST NATIONAL BANCSHARES, INC.
1997 STOCK OPTION PLAN
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS 1
ARTICLE II
THE PLAN 5
2.1 Name 5
2.2 Purpose. 5
2.3 Effective Date. 5
ARTICLE III
PARTICIPANTS 5
ARTICLE IV
ADMINISTRATION 5
4.1 Duties and Powers of the Committee 5
4.2 Interpretation; Rules 6
4.3 No Liability 6
4.4 Majority Rule 6
4.5 Company Assistance 6
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN 6
5.1 Limitations 6
5.2 Antidilution 7
ARTICLE VI
OPTIONS 8
6.1 Types of Options Granted 8
6.2 Option Grant and Agreement 9
6.3 Optionee Limitations 9
6.4 $100,000 Limitation 9
6.5 Exercise Price 10
6.6 Exercise Period 10
6.7 Option Exercise 10
6.8 Reload Options 11
6.9 Nontransferability of Option 11
6.10 Termination of Employment or Service 12
6.11 Employment Rights 12
6.12 Certain Successor Options 12
6.13 Effect of Change in Control 12
ARTICLE VII
RESTRICTED STOCK 12
7.1 Awards of Restricted Stock 12
7.2 Non-Transferability 13
7.3 Lapse of Restrictions 13
7.4 Termination of Employment 13
7.5 Treatment of Dividends 13
7.6 Delivery of Shares 13
ARTICLE VIII
STOCK APPRECIATION RIGHTS 14
8.1 SAR Grants 14
8.2 Determination of Price 14
8.3 Exercise of a SAR 14
8.4 Payment for a SAR 14
8.5 Status of a SAR under the Plan 14
8.6 Termination of SARs 14
8.7 No Shareholder Rights 15
ARTICLE IX
STOCK CERTIFICATES 15
ARTICLE X
TERMINATION AND AMENDMENT 16
10.1 Termination and Amendment 16
10.2 Effect on Grantee's Rights 16
ARTICLE XI
RELATIONSHIP TO OTHER COMPENSATION PLANS 16
ARTICLE XII
MISCELLANEOUS 16
12.1 Replacement or Amended Grants 16
12.2 Forfeiture for Competition 16
12.3 Plan Binding on Successors. 17
12.4 Singular, Plural; Gender 17
12.5 Headings, etc., No Part of Plan 17
12.6 Interpretation 17
Exhibit A i
SCHEDULE A vi
SCHEDULE B vii
<PAGE>
BEACH FIRST NATIONAL BANCSHARES, INC.
1997 STOCK OPTION PLAN
ARTICLE I
DEFINITIONS
As used herein, the following terms have the following meanings unless the
context clearly indicates to the contrary:
"Award" shall mean a grant of Restricted Stock or an SAR.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean theft or destruction of property of the Company, a
Parent, or a Subsidiary, disregard of Company rules or policies, or conduct
evincing willful or wanton disregard of the interests of the Company. Such
determination shall be made by the Committee based on information presented by
the Company and the Employee and shall be final and binding on all parties
hereto.
"Change in Control" shall mean the occurrence of either of the
following events:
(i) A change in the composition of the Board of Directors as a
result of which fewer than one-half of the incumbent directors are directors
who either:
(A) Had been directors of the Company 24 months prior to such
change; or
(B) Were elected, or nominated for election, to the Board of
Directors with the affirmative votes of at least a majority of the directors
who had been directors of the Company 24 months prior to such change and who
were still in office at the time of the election or nomination; or
(ii) Any "person" (as such term is used in sections 13(d) and 14(d)
of the Exchange Act), other than any person who is a shareholder of the Company
on or before the effective date of the Plan, by the acquisition or aggregation
of securities is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 50 percent or more of the combined
voting power of the Company's then outstanding securities ordinarily (and apart
from rights accruing under special circumstances) having the right to vote at
elections of directors (the "Base Capital Stock"); except that any change in
the relative beneficial ownership of the Company's securities by any person
resulting solely from a reduction in the aggregate number of outstanding shares
of Base Capital Stock, and any decrease thereafter in such person's ownership
of securities, shall be disregarded until such person increases in any manner,
directly or indirectly, such person's beneficial ownership of any securities of
the Company.
"Code" shall mean the United States Internal Revenue Code of 1986,
including effective date and transition rules (whether or not codified). Any
reference herein to a specific section of the Code shall be deemed to include a
reference to any corresponding provision of future law.
"Committee" shall mean a committee of at least two Directors
appointed from time to time by the Board, having the duties and authority set
forth herein in addition to any other authority granted by the Board; provided,
however, that with respect to any Options or Awards granted to an individual
who is also a Section 16 Insider, the Committee shall consist of either the
entire Board of Directors or a committee of at least two Directors (who need
not be members of the Committee with respect to Options or Awards granted to
any other individuals) who are Non-Employee Directors, and all authority and
discretion shall be exercised by such Non-Employee Directors, and references
herein to the "Committee" shall mean such Non-Employee Directors insofar as any
actions or determinations of the Committee shall relate to or affect Options or
Awards made to or held by any Section 16 Insider. At any time that the Board
shall not have appointed a committee as described above, any reference herein
to the Committee shall mean a reference to the Board.
"Company" shall mean Beach First National Bancshares, Inc., a South
Carolina corporation.
"Director" shall mean a member of the Board and any person who is an
advisory or honorary director of the Company if such person is considered a
director for the purposes of Section 16 of the Exchange Act, as determined by
reference to such Section 16 and to the rules, regulations, judicial decisions,
and interpretative or "no-action" positions with respect thereto of the
Securities and Exchange Commission, as the same may be in effect or set forth
from time to time.
"Employee" shall mean an employee of the Employer.
"Employer" shall mean the corporation that employs a Grantee.
"Exchange Act" shall mean the Securities Exchange Act of 1934. Any
reference herein to a specific section of the Exchange Act shall be deemed to
include a reference to any corresponding provision of future law.
"Exercise Price" shall mean the price at which an Optionee may
purchase a share of Stock under a Stock Option Agreement.
"Fair Market Value" on any date shall mean (i) the closing sales
price of the Stock, regular way, on such date on the national securities
exchange having the greatest volume of trading in the Stock during the
thirty-day period preceding the day the value is to be determined or, if such
exchange was not open for trading on such date, the next preceding date on
which it was open; (ii) if the Stock is not traded on any national securities
exchange, the average of the closing high bid and low asked prices of the Stock
on the over-the-counter market on the day such value is to be determined, or in
the absence of closing bids on such day, the closing bids on the next preceding
day on which there were bids; or (iii) if the Stock also is not traded on the
over-the-counter market, the fair market value as determined in good faith by
the Board or the Committee based on such relevant facts as may be available to
the Board, which may include opinions of independent experts, the price at
which recent sales have been made, the book value of the Stock, and the
Company's current and future earnings.
"Grantee" shall mean a person who is an Optionee or a person who has
received an Award of Restricted Stock or an SAR.
"Incentive Stock Option" shall mean an option to purchase any stock
of the Company, which complies with and is subject to the terms, limitations
and conditions of Section 422 of the Code and any regulations promulgated with
respect thereto.
"Non-Employee Director" shall have the meaning set forth in Rule 16b-
3 under the Exchange Act, as the same may be in effect from time to time, or in
any successor rule thereto, and shall be determined for all purposes under the
Plan according to interpretative or "no-action" positions with respect thereto
issued by the Securities and Exchange Commission.
"Officer" shall mean a person who constitutes an officer of the
Company for the purposes of Section 16 of the Exchange Act, as determined by
reference to such Section 16 and to the rules, regulations, judicial decisions,
and interpretative or "no-action" positions with respect thereto of the
Securities and Exchange Commission, as the same may be in effect or set forth
from time to time.
"Option" shall mean an option, whether or not an Incentive Stock
Option, to purchase Stock granted pursuant to the provisions of Article VI
hereof.
"Optionee" shall mean a person to whom an Option has been granted
hereunder.
"Parent" shall mean any corporation (other than the Employer) in an
unbroken chain of corporations ending with the Employer if, at the time of the
grant (or modification) of the Option, each of the corporations other than the
Employer owns stock possessing 50 percent or more of the total combined voting
power of the classes of stock in one of the other corporations in such chain.
"Permanent and Total Disability" shall have the same meaning as given
to that term by Code Section 22(e)(3) and any regulations or rulings
promulgated thereunder.
"Plan" shall mean the Beach First National Bancshares, Inc. 1997
Stock Option Plan, the terms of which are set forth herein.
"Purchasable" shall refer to Stock which may be purchased by an
Optionee under the terms of this Plan on or after a certain date specified in
the applicable Stock Option Agreement.
"Qualified Domestic Relations Order" shall have the meaning set forth
in the Code or in the Employee Retirement Income Security Act of 1974, or the
rules and regulations promulgated under the Code or such Act.
"Reload Option" shall have the meaning set forth in Section 6.8
hereof.
"Restricted Stock" shall mean Stock issued, subject to restrictions,
to a Grantee pursuant to Article VII hereof.
"Restriction Agreement" shall mean the agreement setting forth the
terms of an Award, and executed by a Grantee as provided in Section 7.1 hereof.
"SAR" means a stock appreciation right, which is the right to receive
an amount equal to the appreciation, if any, in the Fair Market Value of a
share of Stock from the date of the grant of the right to the date of its
payment, all as provided in Article VIII hereof.
"SAR Price" means the base value established by the Committee for a
SAR on the date the SAR is granted and which is used in determining the amount
of benefit, if any, paid to a Grantee.
"Section 16 Insider" shall mean any person who is subject to the
provisions of Section 16 of the Exchange Act, as provided in Rule 16a-2
promulgated pursuant to the Exchange Act.
"Stock" shall mean the Common Stock, par value $1.00 per share, of
the Company or, in the event that the outstanding shares of Stock are hereafter
changed into or exchanged for shares of a different stock or securities of the
Company or some other entity, such other stock or securities.
"Stock Option Agreement" shall mean an agreement between the Company
and an Optionee under which the Optionee may purchase Stock hereunder, a sample
form of which is attached hereto as Exhibit A (which form may be varied by the
Committee in granting an Option).
"Subsidiary" shall mean any corporation (other than the Employer) in
an unbroken chain of corporations beginning with the Employer if, at the time
of the grant (or modification) of the Option, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50
percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
ARTICLE II
THE PLAN
2.1 Name. This Plan shall be known as "Beach First National Bancshares,
Inc. 1997 Stock Option Plan."
2.2 Purpose. The purpose of the Plan is to advance the interests of the
Company, its Subsidiaries and its shareholders by affording certain employees
and Directors of the Company and its Subsidiaries, as well as key consultants
and advisors to the Company or any Subsidiary, an opportunity to acquire or
increase their proprietary interests in the Company. The objective of the
issuance of the Options and Awards is to promote the growth and profitability
of the Company and its Subsidiaries because the Grantees will be provided with
an additional incentive to achieve the Company's objectives through
participation in its success and growth and by encouraging their continued
association with or service to the Company.
2.3 Effective Date. The Plan shall become effective on April 30, 1997;
provided, however, that if the shareholders of the Company have not approved
the Plan on or prior to the first anniversary of such effective date, then all
options granted under the Plan shall be non-Incentive Stock Options.
ARTICLE III
PARTICIPANTS
The class of persons eligible to participate in the Plan shall consist of
all persons whose participation in the Plan the Committee determines to be in
the best interests of the Company which shall include, but not be limited to,
all Directors and employees, including but not limited to executive personnel,
of the Company or any Subsidiary, as well as key consultants and advisors to
the Company or any Subsidiary.
ARTICLE IV
ADMINISTRATION
4.1 Duties and Powers of the Committee. The Plan shall be administered
by the Committee. The Committee shall select one of its members as its
Chairman and shall hold its meetings at such times and places as it may
determine. The Committee shall keep minutes of its meetings and shall make
such rules and regulations for the conduct of its business as it may deem
necessary. The Committee shall have the power to act by unanimous written
consent in lieu of a meeting, and to meet telephonically. In administering the
Plan, the Committee's actions and determinations shall be binding on all
interested parties. The Committee shall have the power to grant Options or
Awards in accordance with the provisions of the Plan and may grant Options and
Awards singly, in combination, or in tandem. Subject to the provisions of the
Plan, the Committee shall have the discretion and authority to determine those
individuals to whom Options or Awards will be granted and whether such Options
shall be accompanied by the right to receive Reload Options, the number of
shares of Stock subject to each Option or Award, such other matters as are
specified herein, and any other terms and conditions of a Stock Option
Agreement or Restriction Agreement. The Committee shall also have the
discretion and authority to delegate to any Officer its powers to grant Options
or Awards under the Plan to any person who is an employee of the Company but
not an Officer or Director. To the extent not inconsistent with the provisions
of the Plan, the Committee may give a Grantee an election to surrender an
Option or Award in exchange for the grant of a new Option or Award, and shall
have the authority to amend or modify an outstanding Stock Option Agreement or
Restriction Agreement, or to waive any provision thereof, provided that the
Grantee consents to such action.
4.2 Interpretation; Rules. Subject to the express provisions of the
Plan, the Committee also shall have complete authority to interpret the Plan,
to prescribe, amend, and rescind rules and regulations relating to it, to
determine the details and provisions of each Stock Option Agreement, and to
make all other determinations necessary or advisable for the administration of
the Plan, including, without limitation, the amending or altering of the Plan
and any Options or Awards granted hereunder as may be required to comply with
or to conform to any federal, state, or local laws or regulations.
4.3 No Liability. Neither any member of the Board nor any member of the
Committee shall be liable to any person for any act or determination made in
good faith with respect to the Plan or any Option or Award granted hereunder.
4.4 Majority Rule. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present, or any action taken without a meeting evidenced by a writing
executed by all the members of the Committee, shall constitute the action of
the Committee.
4.5 Company Assistance. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability, or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary
in the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations. Subject to any antidilution adjustment pursuant to
the provisions of Section 5.2 hereof, the maximum number of shares of Stock
that may be issued hereunder shall be 110,000. Any or all shares of Stock
subject to the Plan may be issued in any combination of Incentive Stock
Options, non-Incentive Stock Options, Restricted Stock, or SARs, and the amount
of Stock subject to the Plan may be increased from time to time in accordance
with Article X, provided that the total number of shares of Stock issuable
pursuant to Incentive Stock Options may not be increased to more than 110,000
(other than pursuant to anti-dilution adjustments) without shareholder
approval. Shares subject to an Option or issued as an Award may be either
authorized and unissued shares or shares issued and later acquired by the
Company. The shares covered by any unexercised portion of an Option that has
terminated for any reason (except as set forth in the following paragraph), or
any forfeited portion of an Award, may again be optioned or awarded under the
Plan, and such shares shall not be considered as having been optioned or issued
in computing the number of shares of Stock remaining available for option or
award hereunder.
If Options are issued in respect of options to acquire stock of any entity
acquired, by merger or otherwise, by the Company (or any Subsidiary of the
Company), to the extent that such issuance shall not be inconsistent with the
terms, limitations and conditions of Code section 422 or Rule 16b-3 under the
Exchange Act, the aggregate number of shares of Stock for which Options may be
granted hereunder shall automatically be increased by the number of shares
subject to the Options so issued; provided, however, that the aggregate number
of shares of Stock for which Options may be granted hereunder shall
automatically be decreased by the number of shares covered by any unexercised
portion of an Option so issued that has terminated for any reason, and the
shares subject to any such unexercised portion may not be optioned to any other
person.
5.2 Antidilution.
(a) If (x) the outstanding shares of Stock are changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of merger, consolidation, reorganization, recapitalization,
reclassification, combination or exchange of shares, or stock split or stock
dividend, (y) any spin-off, spin-out or other distribution of assets materially
affects the price of the Company's stock, or (z) there is any assumption and
conversion to the Plan by the Company of an acquired company's outstanding
option grants, then:
(i) the aggregate number and kind of shares of Stock for which
Options or Awards may be granted hereunder shall be adjusted proportionately by
the Committee; and
(ii) the rights of Optionees (concerning the number of shares
subject to Options and the Exercise Price) under outstanding Options and the
rights of the holders of Awards (concerning the terms and conditions of the
lapse of any then-remaining restrictions), shall be adjusted proportionately by
the Committee.
(b) If the Company shall be a party to any reorganization in which
it does not survive, involving merger, consolidation, or acquisition of the
stock or substantially all the assets of the Company, the Committee, in its
discretion, may:
(i) notwithstanding other provisions hereof, declare that all
Options granted under the Plan shall become exercisable immediately
notwithstanding the provisions of the respective Stock Option Agreements
regarding exercisability, that all such Options shall terminate 30 days after
the Committee gives written notice of the immediate right to exercise all such
Options and of the decision to terminate all Options not exercised within such
30-day period, and that all then-remaining restrictions pertaining to Awards
under the Plan shall immediately lapse; and/or
(ii) notify all Grantees that all Options or Awards granted
under the Plan shall be assumed by the successor corporation or substituted on
an equitable basis with options or restricted stock issued by such successor
corporation.
(c) If the Company is to be liquidated or dissolved in connection
with a reorganization described in Section 5.2(b), the provisions of such
Section shall apply. In all other instances, the adoption of a plan of
dissolution or liquidation of the Company shall, notwithstanding other
provisions hereof, cause all then-remaining restrictions pertaining to Awards
under the Plan to lapse, and shall cause every Option outstanding under the
Plan to terminate to the extent not exercised prior to the adoption of the plan
of dissolution or liquidation by the shareholders, provided that,
notwithstanding other provisions hereof, the Committee may declare all Options
granted under the Plan to be exercisable at any time on or before the fifth
business day following such adoption notwithstanding the provisions of the
respective Stock Option Agreements regarding exercisability.
(d) The adjustments described in paragraphs (a) through (c) of this
Section 5.2, and the manner of their application, shall be determined solely by
the Committee, and any such adjustment may provide for the elimination of
fractional share interests; provided, however, that any adjustment made by the
Board or the Committee shall be made in a manner that will not cause an
Incentive Stock Option to be other than an Incentive Stock Option under
applicable statutory and regulatory provisions. The adjustments required under
this Article V shall apply to any successors of the Company and shall be made
regardless of the number or type of successive events requiring such
adjustments.
ARTICLE VI
OPTIONS
6.1 Types of Options Granted. The Committee may, under this Plan, grant
either Incentive Stock Options or Options which do not qualify as Incentive
Stock Options. Within the limitations provided in this Plan, both types of
Options may be granted to the same person at the same time, or at different
times, under different terms and conditions, as long as the terms and
conditions of each Option are consistent with the provisions of the Plan.
Without limitation of the foregoing, Options may be granted subject to
conditions based on the financial performance of the Company or any other
factor the Committee deems relevant.
6.2 Option Grant and Agreement. Each Option granted hereunder shall be
evidenced by minutes of a meeting or the written consent of the Committee and
by a written Stock Option Agreement executed by the Company and the Optionee.
The terms of the Option, including the Option's duration, time or times of
exercise, exercise price, whether the Option is intended to be an Incentive
Stock Option, and whether the Option is to be accompanied by the right to
receive a Reload Option, shall be stated in the Stock Option Agreement. No
Incentive Stock Option may be granted more than ten years after the earlier to
occur of the effective date of the Plan or the date the Plan is approved by the
Company's shareholders.
Separate Stock Option Agreements may be used for Options intended to be
Incentive Stock Options and those not so intended, but any failure to use such
separate agreements shall not invalidate, or otherwise adversely affect the
Optionee's interest in, the Options evidenced thereby.
6.3 Optionee Limitations. The Committee shall not grant an Incentive
Stock Option to any person who, at the time the Incentive Stock Option is
granted:
(a) is not an employee of the Company or any of its Subsidiaries; or
(b) owns or is considered to own stock possessing at least 10% of
the total combined voting power of all classes of stock of the Company or any
of its Parent or Subsidiary corporations; provided, however, that this
limitation shall not apply if at the time an Incentive Stock Option is granted
the Exercise Price is at least 110% of the Fair Market Value of the Stock
subject to such Option and such Option by its terms would not be exercisable
after five years from the date on which the Option is granted. For the purpose
of this subsection (b), a person shall be considered to own: (i) the stock
owned, directly or indirectly, by or for his or her brothers and sisters
(whether by whole or half blood), spouse, ancestors and lineal descendants;
(ii) the stock owned, directly or indirectly, by or for a corporation,
partnership, estate, or trust in proportion to such person's stock interest,
partnership interest or beneficial interest therein; and (iii) the stock which
such person may purchase under any outstanding options of the Employer or of
any Parent or Subsidiary of the Employer.
6.4 $100,000 Limitation. Except as provided below, the Committee shall
not grant an Incentive Stock Option to, or modify the exercise provisions of
outstanding Incentive Stock Options held by, any person who, at the time the
Incentive Stock Option is granted (or modified), would thereby receive or hold
any Incentive Stock Options of the Employer and any Parent or Subsidiary of the
Employer, such that the aggregate Fair Market Value (determined as of the
respective dates of grant or modification of each option) of the stock with
respect to which such Incentive Stock Options are exercisable for the first
time during any calendar year is in excess of $100,000 (or such other limit as
may be prescribed by the Code from time to time); provided that the foregoing
restriction on modification of outstanding Incentive Stock Options shall not
preclude the Committee from modifying an outstanding Incentive Stock Option if,
as a result of such modification and with the consent of the Optionee, such
Option no longer constitutes an Incentive Stock Option; and provided that, if
the $100,000 limitation (or such other limitation prescribed by the Code)
described in this Section 6.4 is exceeded, the Incentive Stock Option, the
granting or modification of which resulted in the exceeding of such limit,
shall be treated as an Incentive Stock Option up to the limitation and the
excess shall be treated as an Option not qualifying as an Incentive Stock
Option.
6.5 Exercise Price. The Exercise Price of the Stock subject to each
Option shall be determined by the Committee. Subject to the provisions of
Section 6.3(b) hereof, the Exercise Price of an Incentive Stock Option shall
not be less than the Fair Market Value of the Stock as of the date the Option
is granted (or in the case of an Incentive Stock Option that is subsequently
modified, on the date of such modification).
6.6 Exercise Period. The period for the exercise of each Option granted
hereunder shall be determined by the Committee, but the Stock Option Agreement
with respect to each Option intended to be an Incentive Stock Option shall
provide that such Option shall not be exercisable after the expiration of ten
years from the date of grant (or modification) of the Option.
6.7 Option Exercise.
(a) Unless otherwise provided in the Stock Option Agreement or
Section 6.6 hereof, an Option may be exercised at any time or from time to time
during the term of the Option as to any or all full shares which have become
Purchasable under the provisions of the Option, but not at any time as to less
than 100 shares unless the remaining shares that have become so Purchasable are
less than 100 shares. The Committee shall have the authority to prescribe in
any Stock Option Agreement that the Option may be exercised only in accordance
with a vesting schedule during the term of the Option.
(b) An Option shall be exercised by (i) delivery to the Company at
its principal office a written notice of exercise with respect to a specified
number of shares of Stock and (ii) payment to the Company at that office of the
full amount of the Exercise Price for such number of shares in accordance with
Section 6.7(c). If requested by an Optionee, an Option may be exercised with
the involvement of a stockbroker in accordance with the federal margin rules
set forth in Regulation T (in which case the certificates representing the
underlying shares will be delivered by the Company directly to the
stockbroker).
(c) The Exercise Price is to be paid in full in cash upon the
exercise of the Option and the Company shall not be required to deliver
certificates for the shares purchased until such payment has been made;
provided, however, that in lieu of cash, all or any portion of the Exercise
Price may be paid by tendering to the Company shares of Stock duly endorsed for
transfer and owned by the Optionee, or by authorization to the Company to
withhold shares of Stock otherwise issuable upon exercise of the Option, in
each case to be credited against the Exercise Price at the Fair Market Value of
such shares on the date of exercise (however, no fractional shares may be so
transferred, and the Company shall not be obligated to make any cash payments
in consideration of any excess of the aggregate Fair Market Value of shares
transferred over the aggregate Exercise Price); provided further, that the
Board may provide in a Stock Option Agreement (or may otherwise determine in
its sole discretion at the time of exercise) that, in lieu of cash or shares,
all or a portion of the Exercise Price may be paid by the Optionee's execution
of a recourse note equal to the Exercise Price or relevant portion thereof,
subject to compliance with applicable state and federal laws, rules and
regulations.
(d) In addition to and at the time of payment of the Exercise Price,
the Optionee shall pay to the Company in cash the full amount of any federal,
state, and local income, employment, or other withholding taxes applicable to
the taxable income of such Optionee resulting from such exercise; provided,
however, that in the discretion of the Committee any Stock Option Agreement may
provide that all or any portion of such tax obligations, together with
additional taxes not exceeding the actual additional taxes to be owed by the
Optionee as a result of such exercise, may, upon the irrevocable election of
the Optionee, be paid by tendering to the Company whole shares of Stock duly
endorsed for transfer and owned by the Optionee, or by authorization to the
Company to withhold shares of Stock otherwise issuable upon exercise of the
Option, in either case in that number of shares having a Fair Market Value on
the date of exercise equal to the amount of such taxes thereby being paid, and
subject to such restrictions as to the approval and timing of any such election
as the Committee may from time to time determine to be necessary or appropriate
to satisfy the conditions of the exemption set forth in Rule 16b-3 under the
Exchange Act, if such rule is applicable.
(e) The holder of an Option shall not have any of the rights of a
shareholder with respect to the shares of Stock subject to the Option until
such shares have been issued and transferred to the Optionee upon the exercise
of the Option.
6.8 Reload Options.
(a) The Committee may specify in a Stock Option Agreement (or may
otherwise determine in its sole discretion) that a Reload Option shall be
granted, without further action of the Committee, (i) to an Optionee who
exercises an Option (including a Reload Option) by surrendering shares of Stock
in payment of amounts specified in Sections 6.7(c) or 6.7(d) hereof, (ii) for
the same number of shares as are surrendered to pay such amounts, (iii) as of
the date of such payment and at an Exercise Price equal to the Fair Market
Value of the Stock on such date, and (iv) otherwise on the same terms and
conditions as the Option whose exercise has occasioned such payment, except as
provided below and subject to such other contingencies, conditions, or other
terms as the Committee shall specify at the time such exercised Option is
granted; provided, that the shares surrendered in payment as provided above
must have been held by the Optionee for at least six months prior to such
surrender.
(b) Unless provided otherwise in the Stock Option Agreement, a Reload
Option may not be exercised by an Optionee (i) prior to the end of a one-year
period from the date that the Reload Option is granted, and (ii) unless the
Optionee retains beneficial ownership of the shares of Stock issued to such
Optionee upon exercise of the Option referred to above in Section 6.8(a)(i) for
a period of one year from the date of such exercise.
6.9 Nontransferability of Option. No Option shall be transferable by an
Optionee other than by will or the laws of descent and distribution or, in the
case of non-Incentive Stock Options, pursuant to a Qualified Domestic Relations
Order. During the lifetime of an Optionee, Options shall be exercisable only
by such Optionee (or by such Optionee's guardian or legal representative,
should one be appointed).
6.10 Termination of Employment or Service. The Committee shall have the
power to specify, with respect to the Options granted to a particular Optionee,
the effect upon such Optionee's right to exercise an Option of termination of
such Optionee's employment or service under various circumstances, which effect
may include immediate or deferred termination of such Optionee's rights under
an Option, or acceleration of the date at which an Option may be exercised in
full; provided, however, that in no event may an Incentive Stock Option be
exercised after the expiration of ten years from the date of grant thereof.
6.11 Employment Rights. Nothing in the Plan or in any Stock Option
Agreement shall confer on any person any right to continue in the employ of the
Company or any of its Subsidiaries, or shall interfere in any way with the
right of the Company or any of its Subsidiaries to terminate such person's
employment at any time.
6.12 Certain Successor Options. To the extent not inconsistent with the
terms, limitations and conditions of Code section 422 and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by the Company (or any Subsidiary of the Company) may contain terms that differ
from those stated in this Article VI, but solely to the extent necessary to
preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code section 424(a).
6.13 Effect of Change in Control. The Committee may determine, at the
time of granting an Option or thereafter, that such Option shall become
exercisable on an accelerated basis in the event that a Change in Control
occurs with respect to the Company (and the Committee shall have the discretion
to modify the definition of a Change in Control in a particular Option
Agreement). If the Committee finds that there is a reasonable possibility
that, within the succeeding six months, a Change in Control will occur with
respect to the Company, then the Committee may determine that all outstanding
Options shall be exercisable on an accelerated basis.
ARTICLE VII
RESTRICTED STOCK
7.1 Awards of Restricted Stock. The Committee may grant Awards of
Restricted Stock, which shall be governed by a Restriction Agreement between
the Company and the Grantee. Each Restriction Agreement shall contain such
restrictions, terms, and conditions as the Committee may, in its discretion,
determine, and may require that an appropriate legend be placed on the
certificates evidencing the subject Restricted Stock.
Shares of Restricted Stock granted pursuant to an Award hereunder shall be
issued in the name of the Grantee as soon as reasonably practicable after the
Award is granted, provided that the Grantee has executed the Restriction
Agreement governing the Award, the appropriate blank stock powers and, in the
discretion of the Committee, an escrow agreement and any other documents which
the Committee may require as a condition to the issuance of such Shares. If a
Grantee shall fail to execute the foregoing documents within any time period
prescribed by the Committee, the Award shall be void. At the discretion of the
Committee, Shares issued in connection with an Award shall be deposited
together with the stock powers with an escrow agent designated by the
Committee. Unless the Committee determines otherwise and as set forth in the
Restriction Agreement, upon delivery of the Shares to the escrow agent, the
Grantee shall have all of the rights of a shareholder with respect to such
Shares, including the right to vote the Shares and to receive all dividends or
other distributions paid or made with respect to the Shares.
7.2 Non-Transferability. Until any restrictions upon Restricted Stock
awarded to a Grantee shall have lapsed in a manner set forth in Section 7.3,
such shares of Restricted Stock shall not be transferable other than by will or
the laws of descent and distribution, or pursuant to a Qualified Domestic
Relations Order, nor shall they be delivered to the Grantee.
7.3 Lapse of Restrictions. Restrictions upon Restricted Stock awarded
hereunder shall lapse at such time or times (but, with respect to any award to
a Grantee who is also a Section 16 Insider, not less than six months after the
date of the Award) and on such terms and conditions as the Committee may, in
its discretion, determine at the time the Award is granted or thereafter.
7.4 Termination of Employment. The Committee shall have the power to
specify, with respect to each Award granted to any particular Grantee, the
effect upon such Grantee's rights with respect to such Restricted Stock of the
termination of such Grantee's employment under various circumstances, which
effect may include immediate or deferred forfeiture of such Restricted Stock or
acceleration of the date at which any then-remaining restrictions shall lapse.
7.5 Treatment of Dividends. At the time an Award of Restricted Stock is
made the Committee may, in its discretion, determine that the payment to the
Grantee of any dividends, or a specified portion thereof, declared or paid on
such Restricted Stock shall be (i) deferred until the lapsing of the relevant
restrictions and (ii) held by the Company for the account of the Grantee until
such lapsing. In the event of such deferral, there shall be credited at the
end of each year (or portion thereof) interest on the amount of the account at
the beginning of the year at a rate per annum determined by the Committee.
Payment of deferred dividends, together with interest thereon, shall be made
upon the lapsing of restrictions imposed on such Restricted Stock, and any
dividends deferred (together with any interest thereon) in respect of
Restricted Stock shall be forfeited upon any forfeiture of such Restricted
Stock.
7.6 Delivery of Shares. Except as provided otherwise in Article IX
below, within a reasonable period of time following the lapse of the
restrictions on shares of Restricted Stock, the Committee shall cause a stock
certificate to be delivered to the Grantee with respect to such shares and such
shares shall be free of all restrictions hereunder.
ARTICLE VIII
STOCK APPRECIATION RIGHTS
8.1 SAR Grants. The Committee, in its sole discretion, may grant to any
Grantee a SAR. The Committee may impose such conditions or restrictions on the
exercise of any SAR as it may deem appropriate, including, without limitation,
restricting the time of exercise of the SAR to specified periods as may be
necessary to satisfy the requirements of Rule 16b-3.
8.2 Determination of Price. The SAR Price shall be established by the
Committee in its sole discretion. The SAR Price shall not be less than 100% of
Fair Market Value of the Stock on the date the SAR is granted for a SAR issued
in tandem with an Incentive Stock Option.
8.3 Exercise of a SAR. Upon exercise of a SAR, the Grantee shall be
entitled, subject to the terms and conditions of this Plan and the Agreement,
to receive the excess for each share of Stock being exercised under the SAR of
(i) the Fair Market Value of such share of Stock on the date of exercise over
(ii) the SAR Price for such share of Stock.
8.4 Payment for a SAR. At the sole discretion of the Committee, the
payment of such excess shall be made in (i) cash, (ii) shares of Stock, or
(iii) a combination of both. Shares of Stock used for this payment shall be
valued at their Fair Market Value on the date of exercise of the applicable
SAR.
8.5 Status of a SAR under the Plan. Shares of Stock subject to an Award
of a SAR shall be considered shares of Stock which may be issued under the Plan
for purposes of Section 5.1 hereof, unless the Agreement making the Award of
the SAR provides that the exercise of such SAR results in the termination of an
unexercised Option for the same number of shares of Stock.
8.6 Termination of SARs. A SAR may be terminated as follows:
(a) During the period of continuous employment with the Company,
Parent or Subsidiary, a SAR will be terminated only if it has been fully
exercised or it has expired by its terms.
(b) Upon termination of employment, the SAR will terminate upon the
earliest of (i) the full exercise of the SAR, (ii) the expiration of the
SAR by its terms, and (iii) not more than three months following the date
of employment termination; provided, however, should termination of
employment (A) result from the death or Permanent and Total Disability of
the Grantee, the period referenced in clause (iii) hereof shall be one
year or (B) be for Cause, the SAR will terminate on the date of employment
termination. For purposes of the Plan, a leave of absence approved by the
Company shall not be deemed to be termination of employment unless
otherwise provided in the Agreement or by the Company on the date of the
leave of absence.
(c) Subject to the terms of the Agreement with the Grantee, if a
Grantee shall die or become subject to a Permanent and Total Disability
prior to the termination of employment with the Company, Parent or
Subsidiary and prior to the termination of a SAR, such SAR may be
exercised to the extent that the Grantee shall have been entitled to
exercise it at the time of death or disability, as the case may be, by the
Grantee, the estate of the Grantee or the person or persons to whom the
SAR may have been transferred by will or by the laws of descent and
distribution.
(d) Except as otherwise expressly provided in the Agreement with the
Grantee, in no event will the continuation of the term of a SAR beyond the
date of termination of employment allow the Employee, or his beneficiaries
or heirs, to accrue additional rights under the Plan, have additional SARs
available for exercise, or receive a higher benefit than the benefit
payable as if the SAR had been exercised on the date of employment
termination.
8.7 No Shareholder Rights. The Grantee shall have no rights as a
shareholder with respect to a SAR. In addition, no adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or rights except as provided in Section 5.2 hereof.
ARTICLE IX
STOCK CERTIFICATES
The Company shall not be required to issue or deliver any certificate for
shares of Stock purchased upon the exercise of any Option granted hereunder or
any portion thereof, or deliver any certificate for shares of Restricted Stock
granted hereunder, prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which the Stock is then listed;
(b) The completion of any registration or other qualification of such
shares which the Committee shall deem necessary or advisable under any federal
or state law or under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body;
(c) The obtaining of any approval or other clearance from any federal or
state governmental agency or body which the Committee shall determine to be
necessary or advisable; and
(d) The lapse of such reasonable period of time following the exercise of
the Option as the Board from time to time may establish for reasons of
administrative convenience.
Stock certificates issued and delivered to Grantees shall bear such
restrictive legends as the Company shall deem necessary or advisable pursuant
to applicable federal and state securities laws.
ARTICLE X
TERMINATION AND AMENDMENT
10.1 Termination and Amendment. The Board may at any time terminate the
Plan; provided, however, that the Board (unless its actions are approved or
ratified by the shareholders of the Company within twelve months of the date
that the Board amends the Plan) may not amend the Plan to:
(a) Increase the total number of shares of Stock issuable pursuant
to Incentive Stock Options under the Plan, except as contemplated in Section
5.2 hereof; or
(b) Change the class of employees eligible to receive Incentive
Stock Options that may participate in the Plan.
10.2 Effect on Grantee's Rights. No termination, amendment, or
modification of the Plan shall affect adversely a Grantee's rights under a
Stock Option Agreement or Restriction Agreement without the consent of the
Grantee or his legal representative.
ARTICLE XI
RELATIONSHIP TO OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any other stock option,
incentive, or other compensation plans in effect for the Company or any of its
Subsidiaries; nor shall the adoption of the Plan preclude the Company or any of
its Subsidiaries from establishing any other form of incentive or other
compensation plan for employees or Directors of the Company or any of its
Subsidiaries.
ARTICLE XII
MISCELLANEOUS
12.1 Replacement or Amended Grants. At the sole discretion of the
Committee, and subject to the terms of the Plan, the Committee may modify
outstanding Options or Awards or accept the surrender of outstanding Options or
Awards and grant new Options or Awards in substitution for them. However no
modification of an Option or Award shall adversely affect a Grantee's rights
under a Stock Option Agreement or Restriction Agreement without the consent of
the Grantee or his legal representative.
12.2 Forfeiture for Competition. If a Grantee provides services to a
competitor of the Company or any of its Subsidiaries, whether as an employee,
officer, director, independent contractor, consultant, agent, or otherwise,
such services being of a nature that can reasonably be expected to involve the
skills and experience used or developed by the Grantee while an Employee, then
that Grantee's rights under any Options outstanding hereunder shall be
forfeited and terminated, and any shares of Restricted Stock held by such
Grantee subject to remaining restrictions shall be forfeited, subject in each
case to a determination to the contrary by the Committee.
12.3 Plan Binding on Successors. The Plan shall be binding upon the
successors and assigns of the Company.
12.4 Singular, Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
12.5 Headings, etc., No Part of Plan. Headings of Articles and Sections
hereof are inserted for convenience and reference; they do not constitute part
of the Plan.
12.6 Interpretation. With respect to Section 16 Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Plan administrators fails to so comply, it shall be
deemed void to the extent permitted by law and deemed advisable by the Plan
administrators.
* * * * *
<PAGE>
Exhibit A to
Beach First National Bancshares, Inc.
1997 Stock Option Plan -
Form of Stock Option Agreement
BEACH FIRST NATIONAL BANCSHARES, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), entered into as of this
_____ day of ____________, _____, by and between Beach First National
Bancshares, Inc., a South Carolina corporation (the "Company"), and
_________________ (the "Optionee").
WHEREAS, on __________, 1997, the Board of Directors of the Company
adopted a stock option plan known as the "Beach First National Bancshares, Inc.
1997 Stock Option Plan" (the "Plan"), and recommended that the Plan be approved
by the Company's shareholders; and
WHEREAS, the Committee has granted the Optionee a stock option to purchase
the number of shares of the Company's common stock as set forth below, and in
consideration of the granting of that stock option the Optionee intends to
remain in the employ of the Company; and
WHEREAS, the Company and the Optionee desire to enter into a written
agreement with respect to such option in accordance with the Plan.
NOW, THEREFORE, as an employment incentive and to encourage stock
ownership, and also in consideration of the mutual covenants contained herein,
the parties hereto agree as follows.
1. Incorporation of Plan. This option is granted pursuant to the
provisions of the Plan and the terms and definitions of the Plan are
incorporated herein by reference and made a part hereof. A copy of the Plan
has been delivered to, and receipt is hereby acknowledged by, the Optionee.
2. Grant of Option. Subject to the terms, restrictions, limitations and
conditions stated herein, the Company hereby evidences its grant to the
Optionee, not in lieu of salary or other compensation, of the right and option
(the "Option") to purchase all or any part of the number of shares of the
Company's Common Stock, par value $1.00 per share (the "Stock"), set forth on
Schedule A attached hereto and incorporated herein by reference. The Option
shall be exercisable in the amounts and at the time specified on Schedule A.
The Option shall expire and shall not be exercisable on the date specified on
Schedule A or on such earlier date as determined pursuant to Section 8, 9, or
10 hereof. Schedule A states whether the Option is intended to be an Incentive
Stock Option.
3. Purchase Price. The price per share to be paid by the Optionee for
the shares subject to this Option (the "Exercise Price") shall be as specified
on Schedule A, which price shall be an amount not less than the Fair Market
Value of a share of Stock as of the Date of Grant (as defined in Section 11
below) if the Option is an Incentive Stock Option.
4. Exercise Terms. The Optionee must exercise the Option for at least
the lesser of 100 shares or the number of shares of Purchasable Stock as to
which the Option remains unexercised. In the event this Option is not
exercised with respect to all or any part of the shares subject to this Option
prior to its expiration, the shares with respect to which this Option was not
exercised shall no longer be subject to this Option.
5. Option Non-Transferable. No Option shall be transferable by an
Optionee other than by will or the laws of descent and distribution or, in the
case of non-Incentive Stock Options, pursuant to a Qualified Domestic Relations
Order. During the lifetime of an Optionee, Options shall be exercisable only
by such Optionee (or by such Optionee's guardian or legal representative,
should one be appointed).
6. Notice of Exercise of Option. This Option may be exercised by the
Optionee, or by the Optionee's administrators, executors or personal
representatives, by a written notice (in substantially the form of the Notice
of Exercise attached hereto as Schedule B) signed by the Optionee, or by such
administrators, executors or personal representatives, and delivered or mailed
to the Company as specified in Section 14 hereof to the attention of the
President or such other officer as the Company may designate. Any such notice
shall (a) specify the number of shares of Stock which the Optionee or the
Optionee's administrators, executors or personal representatives, as the case
may be, then elects to purchase hereunder, (b) contain such information as may
be reasonably required pursuant to Section 12 hereof, and (c) be accompanied by
(i) a certified or cashier's check payable to the Company in payment of the
total Exercise Price applicable to such shares as provided herein, (ii) shares
of Stock owned by the Optionee and duly endorsed or accompanied by stock
transfer powers having a Fair Market Value equal to the total Exercise Price
applicable to such shares purchased hereunder, or (iii) a certified or
cashier's check accompanied by the number of shares of Stock whose Fair Market
Value when added to the amount of the check equals the total Exercise Price
applicable to such shares purchased hereunder. Upon receipt of any such notice
and accompanying payment, and subject to the terms hereof, the Company agrees
to issue to the Optionee or the Optionee's administrators, executors or
personal representatives, as the case may be, stock certificates for the number
of shares specified in such notice registered in the name of the person
exercising this Option.
7. Adjustment in Option. The number of Shares subject to this Option,
the Exercise Price and other matters are subject to adjustment during the term
of this Option in accordance with Section 5.2 of the Plan.
8. Termination of Employment.
(a) Except as otherwise specified in Schedule A hereto, in the event of
the termination of the Optionee's employment with the Company or any of its
Subsidiaries, other than a termination that is either (i) for cause, (ii)
voluntary on the part of the Optionee and without written consent of the
Company, or (iii) for reasons of death or disability or retirement, the
Optionee may exercise this Option at any time within 30 days after such
termination to the extent of the number of shares which were Purchasable
hereunder at the date of such termination.
(b) Except as specified in Schedule A attached hereto, in the event of a
termination of the Optionee's employment that is either (i) for cause or (ii)
voluntary on the part of the Optionee and without the written consent of the
Company, this Option, to the extent not previously exercised, shall terminate
immediately and shall not thereafter be or become exercisable.
(c) Unless and to the extent otherwise provided in Exhibit A hereto, in
the event of the retirement of the Optionee at the normal retirement date as
prescribed from time to time by the Company or any Subsidiary, the Optionee
shall continue to have the right to exercise any Options for shares which were
Purchasable at the date of the Optionee's retirement provided that, on the date
which is three months after the date of retirement, the Options will become
void and unexercisable unless on the date of retirement the Optionee enters
into a noncompete agreement with Beach First National Bancshares, Inc. and
continues to comply with such noncompete agreement. This Option does not
confer upon the Optionee any right with respect to continuance of employment by
the Company or by any of its Subsidiaries. This Option shall not be affected
by any change of employment so long as the Optionee continues to be an employee
of the Company or one of its Subsidiaries.
9. Disabled Optionee. In the event of termination of employment
because of the Optionee's becoming a Disabled Optionee, the Optionee (or his or
her personal representative) may exercise this Option, within a period ending
on the earlier of (a) the last day of the one year period following the
Optionee's death or (b) the expiration date of this Option, to the extent of
the number of shares which were Purchasable hereunder at the date of such
termination.
10. Death of Optionee. Except as otherwise set forth in Schedule A with
respect to the rights of the Optionee upon termination of employment under
Section 8(a) above, in the event of the Optionee's death while employed by the
Company or any of its Subsidiaries or within three months after a termination
of such employment (if such termination was neither (i) for cause nor (ii)
voluntary on the part of the Optionee and without the written consent of the
Company), the appropriate persons described in Section 6 hereof or persons to
whom all or a portion of this Option is transferred in accordance with Section
5 hereof may exercise this Option at any time within a period ending on the
earlier of (a) the last day of the one year period following the Optionee's
death or (b) the expiration date of this Option. If the Optionee was an
employee of the Company at the time of death, this Option may be so exercised
to the extent of the number of shares that were Purchasable hereunder at the
date of death. If the Optionee's employment terminated prior to his or her
death, this Option may be exercised only to the extent of the number of shares
covered by this Option which were Purchasable hereunder at the date of such
termination.
11. Date of Grant. This Option was granted by the Board of Directors of
the Company on the date set forth in Schedule A (the "Date of Grant").
12. Compliance with Regulatory Matters. The Optionee acknowledges that
the issuance of capital stock of the Company is subject to limitations imposed
by federal and state law and the Optionee hereby agrees that the Company shall
not be obligated to issue any shares of Stock upon exercise of this Option that
would cause the Company to violate law or any rule, regulation, order or
consent decree of any regulatory authority (including without limitation the
Securities and Exchange Commission) having jurisdiction over the affairs of the
Company. The Optionee agrees that he or she will provide the Company with such
information as is reasonably requested by the Company or its counsel to
determine whether the issuance of Stock complies with the provisions described
by this Section 12.
13. Restriction on Disposition of Shares. The shares purchased pursuant
to the exercise of an Incentive Stock Option shall not be transferred by the
Optionee except pursuant to the Optionee's will, or the laws of descent and
distribution, until such date which is the later of two years after the grant
of such Incentive Stock Option or one year after the transfer of the shares to
the Optionee pursuant to the exercise of such Incentive Stock Option.
14. Miscellaneous.
(a) This Agreement shall be binding upon the parties hereto and their
representatives, successors and assigns.
(b) This Agreement is executed and delivered in, and shall be governed by
the laws of, the State of South Carolina.
(c) Any requests or notices to be given hereunder shall be deemed given,
and any elections or exercises to be made or accomplished shall be deemed made
or accomplished, upon actual delivery thereof to the designated recipient, or
three days after deposit thereof in the United States mail, registered, return
receipt requested and postage prepaid, addressed, if to the Optionee, at the
address set forth below and, if to the Company, to the executive offices of the
Company at 1601 North Oak Street, Suite 305, Myrtle Beach, South Carolina
29577.
(d) This Agreement may not be modified except in writing executed by each
of the parties hereto.
IN WITNESS WHEREOF, the Board of Directors of the Company has caused this
Stock Option Agreement to be executed on behalf of the Company and the
Company's seal to be affixed hereto and attested by the Secretary or an
Assistant Secretary of the Company, and the Optionee has executed this Stock
Option Agreement under seal, all as of the day and year first above written.
BEACH FIRST NATIONAL BANCSHARES, INC. OPTIONEE
By: _________________________ _________________________
Name: Name:
Title: Address:
ATTEST: _________________________
_________________________
______________________________
Secretary/Assistant Secretary
[SEAL]
<PAGE>
SCHEDULE A
TO
STOCK OPTION AGREEMENT
BETWEEN
BEACH FIRST NATIONAL BANCSHARES, INC.
AND
______________________________________
Dated: _______________________
1. Number of Shares Subject to Option: _________________________ Shares.
2. This Option (Check one) [ ] is [ ] is not an Incentive Stock Option.
3. Option Exercise Price: $_______________ per Share.
4. Date of Grant: ______________________
5. Option Vesting Schedule:
Check one:
( ) Options are exercisable with respect to all shares on or after
the date hereof
( ) Options are exercisable with respect to the number of shares
indicated below on or after the date indicated next to the number of shares:
No. of Shares Vesting Date
6. Option Exercise Period:
Check One:
( ) All options expire and are void unless exercised on or before
_______________________, 19__.
( ) Options expire and are void unless exercised on or before the
date indicated next to the number of shares:
No. of Shares Expiration Date
7. Effect of Termination of Employment of Optionee (if different from that
set forth in Sections 8 and 10 of the Stock Option Agreement):
<PAGE>
SCHEDULE B
NOTICE OF EXERCISE
The undersigned hereby notifies Beach First National Bancshares, Inc.
(the "Company") of this election to exercise the undersigned's stock option to
purchase __________________ shares of the Company's common stock, par value
$1.00 per share (the "Common Stock"), pursuant to the Stock Option Agreement
(the "Agreement") between the undersigned and the Company dated ______________.
Accompanying this Notice is (1) a certified or a cashier's check in the amount
of $__________ payable to the Company, and/or (2) _______________ shares of the
Company's Common Stock presently owned by the undersigned and duly endorsed or
accompanied by stock transfer powers, having an aggregate Fair Market Value (as
defined in the First Bancshares, Inc. 1997 Stock Option Plan) as of the date
hereof of $__________________, such amounts being equal, in the aggregate, to
the purchase price per share set forth in Section 3 of the Agreement multiplied
by the number of shares being purchased hereby (in each instance subject to
appropriate adjustment pursuant to Section 5.2 of the Agreement).
IN WITNESS WHEREOF, the undersigned has set his hand and seal, this
_____ day of _______________, 19___.
OPTIONEE [OR OPTIONEE'S
ADMINISTRATOR,
EXECUTOR OR PERSONAL
REPRESENTATIVE]
_________________________________________
Name:
Position (if other than Optionee):
<PAGE>
EXHIBIT A
EXHIBIT 5.1
LAW OFFICES
Nelson Mullins Riley & Scarborough, L.L.P.
A REGISTERED LIMITED LIABILITY PARTNERSHIP
999 Peachtree Street, N.E.
First Union Plaza
Suite 1400
Atlanta, Georgia 30309
TELEPHONE (404) 817-6000
FACSIMILE (404) 817-6050
www.nmrs.com OTHER OFFICES:
Charleston, South Carolina
Charlotte, North Carolina
Columbia, South Carolina
Greenville, South Carolina
Myrtle Beach, South Carolina
March 11, 1998
BeachFirst National Bancshares, Inc.
1550 North Oak Street
Myrtle Beach, South Carolina 29577
Ladies and Gentlemen:
We have acted as counsel to BeachFirst National Bancshares, Inc. (the
"Company") in connection with the filing of a Registration Statement on Form S-
8 (the "Registration Statement") under the Securities Act of 1933, covering the
offering of up to 110,000 shares (the "Shares") of the Company's common stock,
par value $1.00 per share, which may be issued by the Company upon the exercise
of stock options under its 1997 Stock Option Plan. In connection therewith, we
have examined such corporate records, certificates of public officials and
other documents and records as we have considered necessary or proper for the
purpose of this opinion.
This opinion is limited by and is in accordance with the January 1, 1992,
edition of the Interpretive Standards applicable to Legal Opinions to Third
Parties in Corporate Transactions adopted by the Legal Opinion Committee of the
Corporate and Banking Law Section of the State Bar of Georgia.
Based on the foregoing, and having regard to legal considerations which we
deem relevant, we are of the opinion that the Shares, when issued and delivered
as described in the Registration Statement, will be legally issued, fully paid
and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
NELSON MULLINS RILEY & SCARBOROUGH, L.L.P.
/s/ Neil E. Grayson, Esq.
Neil E. Grayson, Esq.
