Exhibit (10)(g)
UNITED CAROLINA BANCSHARES CORPORATION
STOCK OPTION AND INCENTIVE
AWARD PLAN
July 21, 1995
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UNITED CAROLINA BANCSHARES CORPORATION
STOCK OPTION AND INCENTIVE AWARD PLAN
TABLE OF CONTENTS
ARTICLE 1. Establishment, Purpose, and Duration 1
1.1 Establishment of the Plan 1
1.2 Purposes of the Plan 1
1.3 Duration of the Plan 1
ARTICLE 2. Definitions 1
ARTICLE 3. Administration 4
3.1 The Committee 4
3.2 Authority of the Committee 5
3.3 Committee Decisions Binding 5
ARTICLE 4. Shares Subject to the Plan 5
4.1 Number of Shares 5
4.2 Lapsed Grants or Awards 5
4.3 Adjustments in Number of Plan Shares 5
ARTICLE 5. Eligibility and Participation 6
ARTICLE 6. Stock Options 6
6.1 Grant of Options 6
6.2 Option Agreement 7
6.3 Option Price 7
6.4 Duration of Options 7
6.5 Exercise of Options 7
6.6 Payment 7
6.7 Termination of Employment Due to Death, Disability
or Retirement 7
6.8 Termination of Employment for Other Reasons 8
6.9 Nontransferability of Options 8
ARTICLE 7. Stock Appreciation Rights9
7.1 Grant of SAR 9
7.2 Award Agreement 9
7.3 Exercise of SARs 9
ARTICLE 8. Stock Awards - Restricted and Unrestricted 10
8.1 Award 10
8.2 Restricted Period; Lapse of Restrictions 10
8.3 Rights of Restricted Stock Holder; Limitations Thereon 11
8.4 Delivery of Unrestricted Share 11
8.5 Nonassignability of Restricted Stock 12
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ARTICLE 9. Performance Shares 12
9.1 Grant of Performance Shares 12
9.2 Value of Performance Shares 12
9.3 Earning of Performance Shares 12
9.4 Form and Timing of Payment of Performance Shares 13
9.5 Termination of Employment Due to Death, Disability
or Retirement or by the Company Without Cause 13
9.6 Termination of Employment for Other Reasons 13
9.7 Nontransferability 13
ARTICLE 10. Beneficiary Designation 13
ARTICLE 11. Deferrals 14
ARTICLE 12. Rights of Participants 14
12.1 Employment 14
12.2 Participation 14
ARTICLE 13. Change in Control 14
13.1 Occurrence 14
13.2 Definition 15
13.3 Pooling of Interests Accounting 16
ARTICLE 14. Amendment, Modification and Termination 16
14.1 Amendment, Modification and Termination 16
14.2 Grants or Awards Previously Granted 16
14.3 Compliance With Code Section 162(m) 16
ARTICLE 15. Withholding 17
15.1 Tax Withholding17
15.2 Share Withholding 17
ARTICLE 16. Successors 17
ARTICLE 17. Legal Construction 17
17.1 Gender and Number 17
17.2 Severability 17
17.3 Requirements of Law 17
17.4 Regulatory Approvals and Listing 17
17.5 Securities Law Compliance 18
17.6 Governing Law 18
17.7 Disputes and Expenses 18
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UNITED CAROLINA BANCSHARES CORPORATION
Stock Option and Incentive Award Plan
ARTICLE 1. Establishment, Purpose, and Duration
1.1 Establishment of the Plan. United Carolina Bancshares Corporation,
a North Carolina corporation (hereinafter referred to as the "Company"), hereby
establishes a stock option and incentive award plan known as the "United
Carolina Bancshares Corporation Stock Option and Incentive Award Plan" (the
"Plan"), as set forth in this document. The Plan permits the grant of
Non-qualified Stock Options and Incentive Stock Options, and the award of Stock
Appreciation Rights, Stock Awards (restricted or unrestricted), and Performance
Shares.
Subject to the approval of the Plan by the Company's stockholders, the
Plan shall become effective on July 21, 1995, (the "Effective Date") and shall
remain in effect as provided in Section 1.3. Any Award or Grant made under this
Plan prior to stockholder approval of the Plan shall be void unless the Plan is
approved by shareholders at the next meeting of shareholders of the Company.
1.2 Purposes of the Plan. The purposes of the Plan are to promote
greater stock ownership in the Company by those employees who are principally
responsible for its future growth and continued success; to more closely link
the personal interests of Participants to those of the Company's stockholders;
and to provide flexibility to the Company in its ability to motivate, attract
and retain the services of Participants upon whose judgment, initiative and
special effort the continued success of the Company depends.
1.3 Duration of the Plan. The Plan shall commence on the Effective
Date, and shall remain in effect, subject to the right of the Board of Directors
to amend or terminate the Plan at any time pursuant to Article 14, until the day
prior to the tenth (10th) anniversary of the Effective Date.
ARTICLE 2. Definitions
Whenever used in the Plan the following terms shall have the meanings
set forth below and, when the meaning is intended, the initial letter of the
word is capitalized:
(a) "Award" means, individually or collectively, any award under this
Plan of Stock Appreciation Rights, Stock Awards, or Performance Shares.
(b) "Award Agreement" or "Option Agreement" means an agreement entered
into by each Participant and the Company, setting forth, as applicable,
the terms and provisions applicable to Grants or Awards made to
Participants under this Plan.
(c) "Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
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(d) "Board" or "Board of Directors" means the Board of Directors of the
Company.
(e) "Cause" means: (i) with respect to the Company or any Subsidiary
which employs the Participant or for which the Participant primarily
performs services, the commission by the Participant of an act of
fraud, embezzlement, theft or proven dishonesty, or any other illegal
act or practice (whether or not resulting in criminal prosecution or
conviction), or any act or practice which the Committee shall, in good
faith, deem to have resulted in the Participant's becoming unbondable
under the Company's or the Subsidiary's fidelity bond; (ii) the willful
engaging by the Participant in misconduct which is deemed by the
Committee, in good faith, to be materially injurious to the Company or
any Subsidiary, monetarily or otherwise; or (iii) the willful and
continued failure or habitual neglect by the Participant to perform his
duties with the Company or the Subsidiary substantially in accordance
with the operating and personnel policies and procedures of the Company
or the Subsidiary generally applicable to all their employees. For
purposes of this Plan, no act or failure to act by the Participant
shall be deemed to be "willful" unless done or omitted to be done by
the Participant not in good faith and without reasonable belief that
the Participant's action or omission was in the best interest of the
Company and/or the Subsidiary. Notwithstanding the foregoing, if the
Participant has entered into an employment agreement that is binding as
of the date of employment termination, and if such employment agreement
defines "Cause," then the definition of "Cause" in such agreement shall
apply to the Participant in this Plan. "Cause" under either (i), (ii)
or (iii) shall be determined by the Committee.
(f) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" means the committee appointed by the Board to
administer the Plan with respect to Grants or Awards, as specified in
Article 3.
(h) "Company" means United Carolina Bancshares Corporation, a North
Carolina corporation, or any successor thereto, as provided in Article
16.
(i) "Director" means any individual who is a member of the Board of
Directors of the Company.
(j) "Disability" shall have the meaning ascribed to such term in the
Company's long-term disability plan covering the Participant, or in the
absence of such plan, a meaning consistent with Section 22(e) (3) of
the Code.
(k) "Employee" means any full-time, salaried employee of the Company,
or of any of the Company's Subsidiaries. Directors who are not
otherwise employed by the Company or the Company's Subsidiaries shall
not be considered Employees eligible to receive Awards or Grants under
this Plan.
(l) "Effective Date" shall have the meaning ascribed to such term in
Section 1.1.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
(n) "Fair Market Value" shall be determined as follows:
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(i) If, on the relevant date, the Shares are traded on a
national or regional securities exchange or on The NASDAQ National
Market System and closing sale prices for the Shares are customarily
quoted, on the basis of the quoted closing sale price or, if there is
no such sale on the relevant date, then on the last previous day on
which a sale was reported;
(ii) If, on the relevant date, the Shares are not listed on
any securities exchange or traded on the NASDAQ National Market System,
but the Shares otherwise are publicly traded and reported by NASDAQ
(but closing sale prices for the Shares are not customarily quoted), on
the basis of the mean between the closing bid and asked quotations in
such other over-the-counter market as reported by NASDAQ; but, if there
are no bid and asked quotations in the over-the-counter market as
reported by NASDAQ on that date, then the mean between the closing bid
and asked quotations in the over-the-counter market as reported by
NASDAQ on the last previous day such bid and asked prices were quoted;
and
(iii) If, on the relevant date, the Shares are not publicly
traded as described in (i) or (ii), on the basis of the good faith
determination of the Committee.
(o) "Grant" means, individually or collectively, any grant under this
Plan of Non-qualified Stock Options or Incentive Stock Options.
(p "Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 6 which is designated as an Incentive Stock
Option and is intended to meet the requirements of Section 422 of the
Code.
(q) "Insider" shall mean an Employee who is, on the relevant date, an
officer or a director, or a ten percent (10%) beneficial owner of any
class of the Company's equity securities that is registered pursuant to
Section 12 of the Exchange Act, all as defined under Section 16 of the
Exchange Act.
(r) "Named Executive Officer" means a Participant who, as of the date
of vesting and/or payout of an Award or Grant is one of the group of
"covered employees," as defined in the regulations promulgated under
Code Section 162(m), or any successor statute.
(s) "Non-qualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 6, and which is not intended to meet the
requirements of Code Section 422.
(t) "Option" means an Incentive Stock Option or a Non-qualified Stock
Option.
(u) "Option Price" means the price at which a Share may be purchased by
a Participant pursuant to an Option, as determined by the Committee.
(v) "Participant" means an Employee who has an outstanding Grant or
Award made under the Plan.
(w) "Performance Share" means an Award granted to an Employee, as
described in
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Article 9 hereof.
(x) "Retirement" shall have the meaning ascribed to such term in the
Pension Plan for the Employees of United Carolina Bancshares
Corporation and affiliated Companies, as amended.
(y) "Restricted Stock" means restricted Shares awarded in accordance
with the terms of Article 8 and the other provisions of the Plan.
(z) "SAR Award Value" means, as applied to an SAR granted independent
of an Option, such amount, which may be greater than 100% but not less
than 100% of the Fair Market Value of a Share on the date the SAR is
granted, as shall be fixed by the Committee.
(aa) "Shares" means the shares of Common Stock of the Company.
(ab) "Stock Award" means Shares (whether restricted or unrestricted)
awarded under the provisions of Article 8 of the Plan.
(ac) "Stock Appreciation Rights" or "SAR" means an Award of the right
to receive an amount based upon an increase in the Fair Market Value of
the Share.
(ad) "Subsidiary" means any corporation, partnership, joint venture or
other entity in which the Company has a majority voting interest,
either direct or indirect. With respect to a Participant, the term
shall refer to the Subsidiary for which the Participant primarily
performs services.
(ae) "Threatened Change in Control" means any pending tender offer for
the Company's outstanding Shares of Common Stock, or any pending bona
fide offer to acquire the Company by merger or consolidation, or any
other pending action or plan to effect a Change in Control of the
Company.
ARTICLE 3. Administration
3.1 The Committee. The Plan shall be administered by the Personnel
Committee of the Board, or by any substitute Committee appointed by the Board
that is granted authority to administer the Plan, said Committee or substitute
Committee consisting of three (3) or more Directors. All members of the
Committee must meet the "disinterested administration" requirements of Rule
16b-3 under the Exchange Act and the "outside director" requirements of Code
Section 162(m). Qualifiedmembers of the Committee shall be appointed from time
to time by, and shall serve at the discretion of, the Board of Directors.
3.2 Authority of the Committee. Subject to the provisions of the Plan,
the Committee shall have full and exclusive power to select Employees who shall
participate in the Plan (who may change from year to year); determine the size
and types of Awards or Grants; determine the terms and conditions of Awards or
Grants in a manner consistent with the Plan (including vesting provisions and
the duration of the Awards or Grants); construe and interpret the Plan and any
agreement or instrument entered into under the Plan; establish, amend or waive
rules and regulations
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for the Plan's administration; and (subject to the
provisions of Article 14) amend the terms and conditions of any outstanding
Award or Grant to the extent such terms and conditions are within the discretion
of the Committee as provided in the Plan. Further, the Committee shall make all
other determinations which may be necessary or advisable in the Committee's
opinion for the administration of the Plan.
3.3 Committee Decisions Binding. All determinations and decisions made
by the Committee pursuant to Paragraph 3.2 above shall be final, conclusive and
binding on the Company and the Participants, their estates and beneficiaries.
ARTICLE 4. Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the gross number of Shares available for Awards or Grants under the plan shall
be six hundred thousand (600,000) Shares. These Shares may, in the discretion of
the Company, be either authorized but unissued Shares or Shares purchased by the
Company on the open market.
The following rules shall apply for purposes of the determination of
the number of Shares available for Grant or Award under the Plan:
(a) The number of Shares underlying any outstanding Stock
Option, SAR, or Stock Award shall be counted against the gross number
of Plan shares authorized to be issued under the Plan regardless of its
vested status.
(b) The Committee shall determine the appropriate number of
Shares to deduct against the gross number of authorized shares in
connection with the award of Performance Shares.
4.2 Lapsed Grants or Awards. If any Award or Grant made under this Plan
is canceled, terminates, expires or lapses for any reason, any Shares subject to
such Award or Grant shall again be available for issue under the Plan. However,
in the event that prior to the Award's or Grant's cancellation, termination,
expiration or lapse, the holder of the Award or Grant at any time received one
or more "benefits of ownership" pursuant to such Award (as defined by the
Securities and Exchange Commission, pursuant to any rule or interpretation
promulgated under Section 16 of the Exchange Act), the Shares subject to such
Award or Grant shall not be made available for issue under the Plan.
4.3 Adjustments in Number of Plan Shares. In the event of any change in
corporatecapitalization (such as a stock split, or a corporate transaction, such
as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization [whether or
not such reorganization comes within the definition of such term in Code Section
368] or any partial or complete liquidation of the Company) and to prevent
dilution or enlargement of rights under this Plan, an adjustment, as the
Committee shall in its sole discretion determine to be appropriate and
equitable, shall be made in the number and class of Shares which may be
delivered under the Plan, and in the number and class of and/or price of Shares
subject to outstanding Awards or Grants made under the Plan; provided, however,
that the number of Plan Shares subject to any Award or Grant shall always be a
whole number and the Committee
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shall make such adjustments as are necessary to
insure Awards or Grants of whole Shares.
ARTICLE 5. Eligibility and Participation
Any key Employee of the Company, or of any Subsidiary, whose judgment,
initiative and efforts contribute or may be expected to contribute materially to
the successful performance of the Company and its Subsidiaries shall be eligible
to receive an Award or Grant under the Plan. In determining the Employees to
whom such an Award or Grant will be made, the Committee shall take into account
the duties and responsibilities of the respective Employees, their present and
potential contributions to the success of the Company and its Subsidiaries, and
such other factors as the Committee shall deem relevant in connection with
accomplishing the purpose of the Plan.
No person who is a member of the Committee shall be eligible to receive
an Award or Grant under the Plan while so serving. Any person who is a Director
of the Company, but who is not an Employee of the Company or a Subsidiary of the
Company, shall not be eligible to receive an Award or Grant under the Plan.
ARTICLE 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Employees from time to time, as determined by the
Committee. The Committee shall have sole discretion in determining the number of
Shares underlying each Option granted to a Participant; provided, however, that
in the case of any ISO granted under the Plan, the aggregate Fair Market Value
(determined at the time such Option is granted) of the Shares to which ISOs are
exercisable for the first time by the Participant during any calendar year
(under the Plan and all other incentive stock option plans of the Company and
any Subsidiary) shall not exceed $100,000.
The Committee may grant a Participant ISOs, NQSOs or a combination
thereof, and may vary such Grants among Participants. In no event, however,
shall any Employee who owns (within the meaning of Section 424(d) of the Code),
at the time he would otherwise be granted an Option to purchase Shares, stock of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company be eligible to receive an Incentive
Stock Option to purchase Shares hereunder.
The maximum number of Shares subject to Options which can be granted
under the Plan duringa 12-month period to any Participant including a Named
Executive Officer is 50,000 Shares; provided, however, that the maximum number
of Option Shares available for grant to a Participant during any 12-month period
shall be correspondingly reduced by the number of Shares underlying any SAR
Awards made under Article 7 hereof to the Participant during the same period.
6.2 Option Agreement. Each Option granted under the Plan shall be
evidenced by an Option Agreement that shall specify the Option Price, the
duration of the Option, the number of Shares to which the Option pertains and
such other provision as the Committee shall determine. The Option Agreement
shall further specify whether the Option is intended to be an ISO within the
meaning of Code Section 422, or an NQSO, which is not intended to fall under the
provisions of Code Section 422.
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6.3 Option Price. The Option Price for each ISO granted under this
Article 6 shall be not less than the Fair Market Value of a Share on the date
the ISO is granted. The Option Price of each Share underlying a NQSO shall be
established by the Committee, but in no event shall such price be less than
eighty-five percent (85%) of the Fair Market Value (or such higher percentage of
Fair Market Value as may be established by Internal Revenue Service rules or
regulations as the limit for granting discounted stock options without causing
immediate tax consequences to the Participant) of a Share on the date the Option
is granted.
6.4 Duration of Options. Each Option shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no
Options shall be exercisable later than the tenth (10th) anniversary of its
grant.
6.5 Exercise of Options. Options granted under the Plan shall be
subject to such vesting schedules and exercise periods, and other restrictions
and conditions, as the Committee shall in each instance approve, which need not
be the same for each Grant or for each Participant. Except as the Committee may
otherwise provide, Options granted under this Plan shall not generally be
exercisable prior to six (6) months following the date of grant.
6.6 Payment. Options shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment for
the Shares. The Option Price upon exercise of any Option shall be payable to the
Company in full either: (a) in cash, or (b) by tendering previously acquired
Shares having an aggregate Fair Market Value at the time of exercise equal to
the total Option Price (provided that the Shares which are tendered must have
been held by the Participant for the period required by law, if any, prior to
their tender to satisfy the Option Price), or (c) by a combination of (a) and
(b). The Committee also may allow cashless exercises, subject to applicable
securities law restrictions, or by any other means which the committee
determines to be consistent with the Plan's purpose and applicable law.
As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.7 Termination of Employment Due to Death, Disability or Retirement.
Unless otherwise provided by the Committee in the Option Agreement, the
following rules shall apply in the event of the Participant's termination of
employment due to death, Disability or Retirement:
(a) Termination by Death. In the event the Participant dies
while actively employed, all outstanding unvested Options granted to
that Participant shall immediately vest, and thereafter all vested
Options shall remain exercisable at any time prior to their expiration
date, or for one (1) year after the date of death, whichever period is
shorter, by (i) such person(s) as shall have been named as the
Participant's beneficiary, (ii) such person(s) that have acquired the
Participant's rights under such Options by will or by the laws of
descent and distribution, or (iii) the Participant's estate or
representative of the Participant's estate.
(b) Termination by Disability. In the event the employment of
the Participant is
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terminated by reason of Disability, all outstanding
unvested Options granted to the Participant shall immediately vest as
of the date the Committee determines the definition of Disability to
have been satisfied, and thereafter all vested Options shall remain
exercisable at any time prior to their expiration date, or for one (1)
year after the date that the Committee determines the definition of
Disability to have been satisfied, whichever period is shorter.
(c) Termination by Retirement. In the event the employment of
the Participant is terminated by reason of Retirement, the Participant
shall be entitled to prorata vesting of all outstanding unvested
Options. The prorata vesting shall be determined by the Committee, in
its sole discretion, and shall be based upon the length of time that
the Participant held the unvested Options relative to the vesting
period for each Grant of outstanding unvested Options. Upon retirement,
vested Options shall remain exercisable at any time prior to their
expiration date, or for six (6) months after the effective date of
Retirement, whichever period is shorter.
6.8 Termination of Employment for Other Reasons. If the employment of a
Participant shall terminate for any reason other than the reasons set forth in
Section 6.7, and subject to the provisions of Article 13 herein, all Options
held by the Participant which are not vested as of the effective date of his
employment termination shall be immediately forfeited to the Company. However,
the Committee, in its sole discretion, shall have the right to immediately vest
all or any portion of such Options, subject to such terms as the Committee, in
its sole discretion, deems appropriate; provided, however, that the foregoing
discretion shall not be applicable with regard to Grants to Named Executive
Officers except to the extent permitted under Code Section 162m.
In the event a Participant's employment is terminated by the Company or
Subsidiary for Cause, or such Participant voluntarily terminates his
employment(except for a Participant's voluntary termination that is not for
Cause after a Change in Control), the Participant's right to exercise any then
vested outstanding Options shall terminate immediately upon termination of
employment. If the Participant's employment is terminated by the Company or
Subsidiary without Cause, or the Participant voluntarily terminates other than
for Cause after a Change in Control, any Options vested as of his date of
termination shall remain exercisable at any time prior to their expiration date
or for six (6) months after his date of termination of employment, whichever
period is shorter.
6.9 Nontransferability of Options. Unless the Committee provides
otherwise in the OptionAgreement, no Option granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution, and any attempt to
sell, transfer, pledge, assign or otherwise alienate or hypothecate an Option
shall be null and void and of no force or effect, and all Options granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.
ARTICLE 7. Stock Appreciation Rights
7.1 Grant of SAR. Stock Appreciation Rights or SARs may be awarded in
conjunction with, or in addition to, any Options granted under the Plan, or may
be awarded under the Plan independent of any Option. Nothing shall preclude the
award on the same day an Option is granted (with or without related SARs) of
SARs independent of an Option. SARs granted in conjunction with, or in addition
to, an Option may be granted either at the time of the Grant of the Option or
any
42
time thereafter during the term of the Option. SARs awarded in conjunction
with an Option shall entitle the holder of the related Option, upon exercise, in
whole or in part, of the SARs, to surrender the Option, or any portion thereof,
to the extent unexercised, and to receive a number of Shares determined pursuant
to subsection 7.3 below. Such Option shall, to the extent so surrendered, cease
to be exercisable.
The maximum number of Shares underlying SARs which can be awarded under
the Plan during any 12-month period to any Participant including a Named
Executive Officer is 50,000 Shares; provided, however, that the maximum number
of Shares available for award to a Participant during any 12-month period shall
be correspondingly reduced by the number of Shares subject to Options granted to
the Participant during the same period.
7.2 Award Agreement. SARs shall be subject to such terms and conditions
not inconsistent with the Plan as shall from time to time be approved by the
Committee and to the following:
(a) SARs granted in conjunction with an Option shall be
exercisable at such time or times and to the extent, but only to the
extent, that the Option to which they relate shall be exercisable.
(b) SARs not granted in conjunction with an Option shall be
exercisable at such time or times as may be determined by the Committee
at the time of grant, but shall be subject to the same restrictions and
other rules as to duration, transferability, and exercisability that
are set out for Options in Article 6 above.
7.3 Exercise of SARs. (a) Upon exercise of SARs, the holder thereof
shall be entitled to receive a number of Shares which have an aggregate Fair
Market Value on the date of exercise equal to the amount by which the Fair
Market Value per share of one Share on the date of such exercise shall exceed
(i) in the case of SARs granted in conjunction with an Option or in addition to
an Option, the Option price per Share of the related Option, or (ii) in the case
of SARs unrelated to an Option, its SAR Grant Value, in each case multiplied by
the number of Shares in respect of which the SARs shall have been exercised.
(b) All or any part of the obligation arising out of an exercise of
SARs, whether or not suchrights are granted in conjunction with an Option, may
in the sole discretion of the Committee (and consistent with the requirements of
Rule 16b-3 of the Exchange Act) be settled by the payment of cash equal to the
aggregate Fair Market Value of the Shares that would otherwise have been
delivered under subsection (a) above.
(c) To the extent that SARs granted in conjunction with an Option shall
be exercisable and whether the obligation upon such exercise shall be discharged
by the delivery of Shares or the payment of cash, the Option in connection with
which such SAR shall have been granted shall be deemed to have been exercised
for the purpose of the maximum share limitation set forth in the Plan.
(d) To the extent that SARs granted in addition to, or independent of,
an Option shall be exercised and whether the obligation upon such exercise shall
be discharged by the delivery of Shares or the payment of cash, the number of
Shares in respect of which the SARs shall have been exercised shall be charged
against the maximum share limitation set forth in the Plan.
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ARTICLE 8. Stock Awards - Restricted and Unrestricted
8.1 Award. The Committee may from time to time in its discretion make
Stock Awards to Participants and may determine the number of Shares to be
awarded. The Committee shall determine the terms and conditions of, and the
amount of payment, if any, to be made by the Participant for such Stock Award.
An Award of Restricted Stock may require the Participant to pay for such Shares
of Restricted Stock, but the Committee may establish a price below Fair Market
Value at which the Participant can purchase the Shares of Restricted Stock. Each
Award of Restricted Stock will be evidenced by an Award Agreement containing
terms and conditions not inconsistent with the Plan as the Committee shall
determine to be appropriate in its sole discretion.
The maximum number of Shares that may be awarded under a Stock Award
(whether restricted or unrestricted) to a Named Executive Officer during any
12-month period is 20,000 Shares
8.2 Restricted Period; Lapse of Restrictions. At the time an Award of
Restricted Stock is made, the Committee shall establish a period or periods of
time (the "Restricted Period") applicable to such Award which, unless the
Committee otherwise provides, shall not be less than six (6) months. Subject to
the other provisions of this Section 8, at the end of the Restricted Period all
restrictions shall lapse and the Restricted Stock shall vest in the Participant.
At the time an Award is made, the Committee may, in its discretion, prescribe
conditions for the incremental lapse of restrictions during the Restricted
Period and for the lapse or termination of restrictions upon the occurrence of
other conditions in addition to or other than the expiration of the Restricted
Period with respect to all or any portion of the Restricted Stock. Such
conditions may, but need not, include without limitation:
(a) The death, Disability or Retirement of the Employee to whom
Restricted Stock is awarded, or
(b) The occurrence of a Change in Control of Threatened Change
in Control.
The Committee may also, in its discretion, shorten or terminate the Restricted
Period, or waive anyconditions for the lapse or termination of restrictions with
respect to all or any portion of the Restricted Stock at any time after the date
the Award is made.
8.3 Rights of Restricted Stock Holder; Limitations Thereon. Upon an
Award of Restricted Stock, a stock certificate (or certificates) representing
the number of Shares of Restricted Stock granted to the Participant shall be
registered in the Participant's name and shall be held in custody by the Company
or a bank selected by the Committee for the Participant's account. Following
such registration, the Participant shall have the rights and privileges of a
stockholder as to such Restricted Stock, including the right to receive
dividends and to vote such Restricted Stock, provided that, the right to receive
cash dividends shall be the right to receive such dividends either in cash
currently or by payment in Restricted Stock, as the Committee shall determine,
and provided further that the following restrictions shall apply:
(a) The Participant shall not be entitled to delivery of a
certificate until the
44
expiration or termination of the Restricted
Period for the Shares represented by such certificate and the
satisfaction of any and all other conditions prescribed by the
Committee;
(b) None of the Shares of Restricted Stock may be sold,
transferred, assigned, pledged, or otherwise encumbered or disposed of
during the Restricted Period and until the satisfaction of any and all
other conditions prescribed by the Committee; and
(c) All of the Shares of Restricted Stock that have not vested
shall be forfeited and all rights of the Participant to such Shares of
Restricted Stock shall terminate without further obligation on the part
of the Company, unless the Participant has remained a full-time
employee of the Company, or any of its Subsidiaries, until the
expiration or termination of the Restricted Period and the satisfaction
of any and all other conditions prescribed by the Committee applicable
to such Shares of Restricted Stock. Upon the forfeiture of any Shares
of Restricted Stock, such forfeited Shares shall be transferred to the
Company without further action by the Participant.
With respect to any Shares received as a result of adjustments under
Section 4.3 hereof and any Shares received with respect to cash dividends
declared on Restricted Stock, the Participant shall have the same rights and
privileges, and be subject to the same restrictions, as are set forth in this
Section 8.
8.4 Delivery of Unrestricted Shares. Upon the expiration or termination
of the Restricted Period for any Shares of Restricted Stock and the satisfaction
of any and all other conditions prescribed by the Committee, the restrictions
applicable to such Shares of Restricted Stock shall lapse and a stock
certificate for the number of Shares of Restricted Stock with respect to which
the restrictions have lapsed shall be delivered, free of all such restrictions
except any that may be imposed by law, to the holder of the Restricted Stock.
The Company shall not be required to deliver any fractional Share but will pay,
in lieu thereof, the Fair Market Value (determined as of the date the
restrictions lapse) of such fractional share to the holder thereof. Prior to or
concurrently with the delivery of a certificate for Restricted Stock, the holder
shall be required to pay an amount necessary to satisfy any applicablefederal,
state and local tax requirements as set out in Article 15 below.
8.5 Nonassignability of Restricted Stock. Unless the Committee provides
otherwise in the Award Agreement, no Award of, nor any right or interest of a
Participant in or to any Restricted Stock, or in any instrument evidencing any
Award of Restricted Stock under the Plan, may be assigned, encumbered or
transferred except, in the event of the death of a Participant, by will or the
laws of descent and distribution.
ARTICLE 9. Performance Shares
9.1 Grant of Performance Shares. Subject to the terms of the Plan,
Performance Shares may be granted to participants from time to time for no
payment. The Committee shall have complete discretion in determining the number
of Performance Shares granted to each Participant; provided, however, that
unless and until the Company's stockholders vote to change the maximum number of
Performance Shares that may be earned by any one Named Executive Officer
(subject to the terms of Article 14 hereof), none of the Named Executive
Officers may earn more than 20,000 Performance Shares with respect to any
performance period.
45
9.2 Value of Performance Shares. Each Performance Share shall have a
value equal to the Fair Market Value of a Share on the date the Performance
Share is earned. The Committee shall set performance goals in its discretion
which, depending on the extent to which they are met, will determine the number
of Performance Shares that will be earned by the Participants. The time period
during which the performance goals must be met shall be called a "performance
period." Performance periods shall, in all cases, equal or exceed two (2) years
in length. The performance goals shall be established at the beginning of the
performance period (or within such time period as is permitted by Code Section
162(m) and the regulations thereunder).
The Committee will select one or more of the following performance
measures for purposes of Awards under the Plan to Named Executive Officers:
total shareholder return, average return on assets, average return on equity,
average growth in assets, increase in operating earnings per share, increase in
book value per share of Common Stock, and ratio of operating revenue to
operating overhead. The Committee, in its sole discretion, may assign the
relative weights to be given to each performance measure selected by it. For
Participants other than Named Executive Officers, the Committee may, in its sole
discretion, select such performance measures (from among those described above
or others) as it may deem appropriate, and may assign the relative weights to be
given to each performance measure selected by it. The Committee may, in its sole
discretion, reserve the right to exclude the effect of extraordinary and
non-recurring items from calculations involving any performance measure.
In the event that applicable tax and/or securities laws (including, but
not limited to, Code Section 162(m) and Section 16 of the Exchange Act) change
to permit Committee discretion to alter the governing performance measures
without obtaining stockholder approval of such changes, the Committee shall have
sole discretion to make such changes without obtaining stockholder approval.
9.3 Earning of Performance Shares. After the applicable performance
period has ended, the Committee shall certify the extent to which the
established performance goals have been achieved. TheCommittee may increase or
decrease the amount of any Performance Share Award otherwise payable to a
Participant under this Article 9 if, in the Committee's view, the Company's
financial performance during the relevant performance period justifies such
adjustment, whether or not any one or more of the established performance goals
has been achieved; provided, however, that the Committee shall have no
discretion to increase the amount of any Performance Share Award otherwise
payable to a Named Executive Officer under this Article 9.
9.4 Form and Timing of Payment of Performance Shares. Except as
otherwise provided in Article 13 hereof, payment of earned Performance Shares
shall be made in a single lump sum as soon as practical after the end of the
performance period to which the Award relates. The Committee, in its sole
discretion, may pay earned Performance Shares in the form of cash or in Shares
(or in a combination thereof) which have, as of the last day of the performance
period, an aggregate value equal to the Fair Market Value of the earned
Performance Shares.
9.5 Termination of Employment Due to Death, Disability or Retirement or
by the Company Without Cause. Unless the Award Agreement provides otherwise, in
the event the employment of a Participant is terminated by reason of death,
Disability or Retirement or by the Company without Cause during a performance
period, the Participant shall be entitled to a prorated payout with respect to
the unearned Performance Shares. The prorated payout shall be determined
46
by the
Committee, in its sole discretion, and shall be based upon the length of time
that the Participant held the unearned Performance Shares during the performance
period relative to the performance period, and shall be the greater of the
target award prorated for the applicable time period, or the payout earned on
the basis of actual performance, measured by the achievement of the established
performance goals prorated to the time of his termination due to death,
Disability or Retirement or by the Company without Cause.
Payment of earned Performance Shares to Participants whose termination
is due to Retirement or by the Company without Cause shall be made at the same
time payments are made to Participants who did not terminate employment during
the applicable performance period. Payment of earned Performance Shares to
Participants whose termination is due to death or Disability shall be made as
soon as practical after the Participant's termination.
9.6 Termination of Employment for Other Reasons. Except as provided in
Article 13 and in the Award Agreement, in the event that a Participant's
employment terminates during a performance period for any reason other than
those reasons set forth in Section 9.5 hereof, all unearned Performance Shares
shall be forfeited by the Participant to the Company.
9.7 Nontransferability. Performance Shares may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, a
Participant's Performance Share rights under the Plan shall be exercisable
during the Participant's lifetime only by the Participant or the Participant's
legal representative.
ARTICLE 10. Beneficiary Designation
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid incase of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company and shall be effective only when filed by the
Participant, in writing, with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
ARTICLE 11. Deferrals
The Committee may permit a Participant to defer to another plan or
program such Participant's receipt of Shares or cash that would otherwise be due
to such Participant by virtue of the exercise of an Option or SAR, the vesting
of Restricted Stock or the earning of Performance Shares. If any such deferral
election is required or permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals.
ARTICLE 12. Rights of Participants
12.1 Employment. Nothing in the Plan shall interfere with or limit in
any way the right of the Company or a Subsidiary to terminate any Participant's
employment at any time, nor confer upon
47
any Participant any right to continue in
the employ of the Company or a Subsidiary. For purpose of the Plan, transfer of
employment of a Participant between the Company and any one of its Subsidiaries
(or between Subsidiaries) shall not be deemed a termination of employment.
12.2 Participation. No Employee shall have the right to be selected to
receive an Award or Grant under this Plan, or, having been so selected, to be
selected to receive a future Award or Grant.
ARTICLE 13. Change in Control
13.1 Occurrence. Upon the occurrence of a Change in Control, or upon
the termination of a Participant by the Company or Subsidiary other than for
Cause as a result of a Threatened Change in Control, and except as provided in
the Award Agreement, Option Agreement or Section 13.3, or as prohibited by the
terms of Article 17 hereof:
(a) All outstanding, unvested Options and SARs granted or
awarded to Participants hereunder (or, in the case of the termination
of a Participant by the Company or Subsidiary other than for Cause as a
result of a Threatened Change in Control, to the terminated
Participant) shall become fully vested and immediately exercisable;
(b) To the extent provided by the Committee in the Award
Agreement, the earning of unearned Performance Shares will be based
upon the target award levels or the actual performance compared with
goals prorated to the date of the Change in Control or to the date of
the Participant's termination by the Company or Subsidiary other than
for Cause as a result of a Threatened Change in Control,whichever
provides the greater amount. Unearned Performance Shares outstanding at
the time of a Change in Control or at the time of a Participant's
termination by the Company or Subsidiary other than for Cause as a
result of a Threatened Change in Control will be fully vested (subject
to the employment requirements in the next sentence) and will be
payable in Common Stock or cash, or a combination thereof, as
determined by the Committee. The Participant will be entitled to
payment of vested Performance Shares for a performance period only if
(i) he remains employed by the Company or Subsidiary (or their
respective successors) until the date that would have been the last day
of the performance period, at which time the payment of the Performance
Shares shall be made, or (ii) prior to the end of the performance
period, his employment is terminated by the Company or Subsidiary
without Cause, he terminates employment for a reason other than Cause
or he retires (whether early, normal or late) under the Retirement
Plan, dies or becomes Disabled. In any of these cases, payment of
vested Performance Shares shall be made as soon as possible after the
Participant ceases active employment.
(c) Unless otherwise provided in the Award Agreement, all
restrictions on an Award of Restricted Stock shall lapse and such
Restricted Stock shall be delivered to the Participant in accordance
with Section 8.4; and
(d) Subject to Article 14 hereof, the Committee shall have the
authority to make any modifications to the Awards or Grants as
determined by the Committee to be appropriate before the effective date
of the Change in Control or the date of the Participant's termination
48
by the Company or Subsidiary other than for Cause as a result of a
Threatened Change in Control.
13.2 Definition. For purposes of the Plan, a "Change in Control" shall
be deemed to have occurred if:
(a) the Company or its subsidiary, United Carolina Bank,
consolidates or merges with or into another corporation, or is
otherwise reorganized, if the Company or United Carolina Bank is not
the surviving corporation in such transaction or if after such
transaction any other corporation, association or other person, entity
or group or the shareholders thereof own, direct and/or indirectly,
more than 50% of the then outstanding shares of Common Stock or more
than 50% of the assets of the Company or United Carolina Bank; or
(b) more than 35% of the then outstanding shares of Common
Stock of the Company or United Carolina Bank are, in a single
transaction or in a series of related transactions, sold or otherwise
transferred to or are acquired by (except as collateral security for a
loan) any other corporation, association or other person, entity or
group, whether or not any such shareholder or any shareholders included
in such group were shareholders of the Company or United Carolina Bank
prior to the Change in Control; or
(c) all or substantially all of the assets of the Company or
United Carolina Bank are sold or otherwise transferred to or otherwise
acquired by any other corporation, association or other person, entity
or group; or
(d) the occurrence of any other event or circumstance which is
not covered by (a) through (c) above which the Committee determines
affects control of the Company or United Carolina Bank and constitutes
a Change in Control for purpose of the Plan.
13.3 Pooling of Interests Accounting. No Award or Grant made under this
Plan shall have a scheduled vesting date which is earlier than the date two
years following the Effective Date. During the two-year period commencing on the
Effective Date, the acceleration of vesting provided for in Section 13.1 shall
not apply in a transaction involving a Change in Control if both of the
following circumstances exist:
(a) The provisions contained in Section 13.1 create conditions which
would preclude the use of pooling of interests accounting; and
(b) The completion of the transaction is subject to the use of pooling
of interests accounting.
ARTICLE 14. Amendment, Modification and Termination
14.1 Amendment, Modification and Termination. The Board may, at any
time and from time to time, alter, amend, suspend or terminate the Plan in whole
or in part; provided, that, unless approved by the holders of a majority of the
total number of Shares of the Company represented and entitled to vote at a
meeting at which a quorum is present, no amendment shall be made to the Plan if
such amendment would (a) materially modify the eligibility requirements provided
in Article 5; (b)
49
increase the total number of Shares (except as provided in
Section 4.3) which may be granted or awarded under the Plan, as provided in
Section 4.1; (c) extend the term of the Plan; or (d) amend the Plan in any other
manner which the Board, in its discretion, determines should become effective
only if approved by the stockholders even though such stockholder approval is
not expressly required by the Plan or by law. No amendment which requires
stockholder approval in order for the Plan to continue to comply with Rule 16b-3
under the Exchange Act, including any successor to such Rule, shall be effective
unless such amendment shall be approved by the requisite vote of stockholders.
14.2 Grants or Awards Previously Granted. No termination, amendment or
modification of the Plan shall adversely affect in any material way any Award or
Grant previously made under the Plan, without the written consent of the
Participant holding such Award or Grant. The Committee shall, with the written
consent of the Participant holding such Award or Grant, have the authority to
cancel Awards or Grants outstanding and grant replacement Awards or Grants
therefor.
14.3 Compliance With Code Section 162(m). It is the intent of the Board
that all Awards or Grants made under this Plan shall comply with the
requirements of Code Section 162(m). In the event that changes are made to Code
Section 162(m) to permit greater flexibility with respect to any Award or Grant
under the Plan, the Committee may, subject to this Article 14, make any
adjustments it deemsappropriate in such Award or Grant.
ARTICLE 15. Withholding
15.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising in connection with an Award or Grant under this Plan.
15.2 Share Withholding. With respect to withholding required upon the
exercise of Options, or upon any other taxable event arising as a result of
Awards or Grants made hereunder which are to be paid in the form of Shares,
Participants may request, subject to the approval of the Committee, to satisfy
the withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax which could be imposed on the transaction.
All such requests shall be irrevocable, made in writing, and signed by the
Participant, and requests by Insiders shall additionally comply with all legal
requirements applicable to Share transactions by such Participants.
ARTICLE 16. Successors
All obligations of the Company under the Plan, with respect to Awards
or Grants made hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation or otherwise, of all or substantially all of the
business and/or assets of the Company.
ARTICLE 17. Legal Construction
50
17.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
17.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
17.3 Requirements of Law. The making of Awards or Grants and the
issuance of Shares under the Plan shall be subject to all applicable laws, rules
and regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
17.4 Regulatory Approvals and Listing. The Company shall not be
required to issue any certificate or certificates for Shares under the Plan
prior to (i) obtaining any approval from any governmental agency which the
Company shall, in its discretion, determine to be necessary or advisable, (ii)
the admission of such shares to listing on any national securities exchange on
which the Company'sShares may be listed, and (iii) the completion of any
registration or other qualification of such Shares under any state or federal
law or ruling or regulations of any governmental body which the Company shall,
in its sole discretion, determine to be necessary or advisable.
Notwithstanding any other provision set forth in the Plan, if required
by the then-current Section 16 of the Exchange Act, any "derivative security" or
"equity security" offered pursuant to the Plan to any Insider may not be sold or
transferred for at least six (6) months after the date of grant of such Award.
The terms "equity security" and "derivative security" shall have the meanings
ascribed to them in the then-current Rule 16(a) under the Exchange Act.
The Committee may impose such restrictions on any Shares acquired
pursuant to the Plan as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities laws, under the requirements of
any stock exchange or market upon which such Shares are then listed and/or
traded and under any blue sky or state securities laws applicable to such
Shares.
17.5 Securities Law Compliance. With respect to 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 provisions of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
17.6 Governing Law. To the extent not preempted by Federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of North Carolina.
17.7 Disputes and Expenses. After a Change in Control or a
Participant's termination by the Company or Subsidiary other than for Cause as a
result of a Threatened Change in Control, if a Participant affected by such
Change in Control or termination incurs legal fees or other expenses in seeking
to obtain or enforce any rights to benefits under this Plan and is successful,
in whole or in part, in obtaining or enforcing any such rights through
settlement, litigation, arbitration or otherwise, the Company shall promptly pay
the affected Participant's reasonable legal fees and expenses incurred in
enforcing his rights under the Plan.
51
AS APPROVED BY THE BOARD OF DIRECTORS OF UNITED CAROLINA BANCSHARES
CORPORATION ON JULY 21, 1995.
UNITED CAROLINA BANCSHARES CORPORATION
By: /s/ E. Rhone Sasser
-----------------------
Chief Executive Officer
ATTEST:
By: /s/ Howard V. Hudson
----------------
Secretary
52