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EXHIBIT 4.2
SOUTHBANC SHARES, INC. MANAGEMENT RECOGNITION AND DEVELOPMENT PLAN
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SOUTHBANC SHARES, INC.
MANAGEMENT RECOGNITION AND DEVELOPMENT PLAN
SECTION 1. PURPOSE AND ADOPTION OF THE PLAN
(a) PURPOSE. The purpose of the SouthBanc Shares, Inc. Management
Recognition and Development Plan is to assist the Corporation and its
subsidiaries in attracting, retaining and motivating key management employees
and non-employee directors who will contribute to the Corporation's success. The
Plan is intended to recognize the contributions of key management personnel to
the success of the Corporation and its subsidiaries, to link the benefits paid
to eligible employees and directors who have substantial responsibility for the
successful operation, administration and management of the Corporation with the
enhancement of shareholder value and to provide eligible employees and directors
with an opportunity to acquire a greater proprietary interest in the Corporation
through the grant of restricted shares of Stock which, in accordance with the
terms and conditions set forth below, will vest only if the employees meet the
vesting criteria established by the Board and this Plan.
(b) ADOPTION AND EFFECTIVE DATE. The Plan shall be effective on April 16,
1999 but only if, prior to such date, the Plan is approved by the Corporation's
shareholders. The Plan will be so approved if at an annual or special meeting of
shareholders held prior to such date a quorum is present and the votes of the
holders of a majority of the securities of the Corporation present or
represented by proxy and entitled to vote on such a matter shall be cast in
favor of its approval.
SECTION 2. DEFINITIONS
For purposes of this Plan, the capitalized terms set forth below shall
have the following meanings:
AWARD AGREEMENT means a written agreement between the Corporation and a
Participant specifically setting forth the terms and conditions of an award of
Restricted Stock granted to a Participant pursuant to Section 5 of the Plan.
BOARD means the Board of Directors of the Corporation.
CHANGE IN CONTROL shall mean an event deemed to occur if and when (a) an
offeror other than the Corporation purchases shares of the common stock of the
Corporation pursuant to a tender or exchange offer for such shares, (b) any
person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act)
is or becomes the beneficial owner, directly or indirectly, of securities of the
Corporation representing twenty-five percent (25%) or more of the combined
voting power of the Corporation's then outstanding securities, (c) the
membership of the board of directors of the Corporation changes as the result of
a contested election, such that individuals who were directors at the beginning
of any twenty-four (24) month period (whether commencing before or after the
date of adoption of this Plan) do not constitute a majority of the Board at the
end of such period, or (d) shareholders of the Corporation approve a merger,
consolidation, sale or disposition of all or substantially all of the
Corporation's assets or a plan of partial or complete liquidation. If any of the
events enumerated in clauses (a) - (d) occur, the Board shall determine the
effective date of the change in control resulting therefrom.
CORPORATION means SouthBanc Shares, Inc., a Delaware corporation, and its
successors.
DATE OF GRANT means the date as of which an award of Restricted Stock is
granted in accordance with Section 5.
DISABILITY means any physical or mental injury or disease of a permanent
nature which renders a Participant incapable of meeting the requirements of the
employment or service performed by such Participant immediately prior
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to the commencement of such disability. The determination of whether a
Participant is disabled shall be made by the Board in its sole and absolute
discretion.
EFFECTIVE DATE means the date as of which the Plan shall become effective,
as determined in accordance with Section 1(b).
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
FAIR MARKET VALUE shall be determined as follows:
(a) If the stock is traded or quoted on the Nasdaq Stock Market or other
national securities exchange on any date, then the Fair Market Value shall be
the average of the highest and lowest selling price on such exchange on such
date or, if there were no sales on such date, then on the next prior business
day on which there was a sale.
(b) If the stock is not traded or quoted on the Nasdaq Stock Market or
other national securities exchange, then the Fair Market Value shall be a value
determined by the Board in good faith on such basis as it deems appropriate.
PARTICIPANT means any person selected by the Board, pursuant to Section
3(b), to participate under the Plan.
PLAN means this SouthBanc Shares, Inc. Management Recognition and
Development Plan, as the same may be amended from time to time.
RESTRICTED STOCK means shares of Stock awarded to a Participant subject to
restrictions as described in Section 5.
STOCK means the common stock, par value $0.01 per share, of the
Corporation.
SECTION 3. ADMINISTRATION AND PARTICIPATION
(a) ADMINISTRATION. The Plan shall be administered by the Board which
shall have exclusive and final authority and discretion in each determination,
interpretation or other action affecting the Plan and its Participants. The
Board shall have the sole and absolute authority and discretion to interpret the
Plan, to establish and modify administrative rules for the Plan, to select, in
accordance with Section 3(b), the persons who will be Participants hereunder, to
impose, in accordance with Section 5(a), such conditions and restrictions as it
determines appropriate and to take such other actions and make such other
determinations in connection with the Plan as it may deem necessary or
advisable.
(b) DESIGNATION OF PARTICIPANTS. Participants in the Plan shall be such
employees of the Corporation and its subsidiaries, as the Board, in its sole
discretion, may designate. The Board shall consider such factors as it deems
pertinent in selecting Participants.
SECTION 4. STOCK ISSUABLE UNDER THE PLAN
(a) NUMBER OF SHARES OF STOCK ISSUABLE. Subject to adjustments as provided
in Section 6(c), the maximum number of shares of Stock available for issuance
under the Plan shall be 91,252. The Stock to be offered under the Plan shall be
authorized and unissued Stock, Stock which shall have been reacquired by the
Corporation and held in its treasury, or Stock held in a trust established by
the Corporation for the purpose of funding awards under the Plan with shares
acquired on the open market with funds contributed by the Corporation or any
subsidiary.
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(b) SHARES SUBJECT TO TERMINATED AWARDS. Shares of Stock forfeited as
provided in Section 5(b) may again be issued under the Plan.
SECTION 5. RESTRICTED STOCK
Subject to the terms of this Plan, the Board may grant to any Participant
an award of Restricted Stock in respect of such number of shares of Stock, and
subject to such terms and conditions relating to forfeitability and restrictions
on delivery and transfer (whether based on performance standards, periods of
service or otherwise), as the Board shall determine in its sole discretion. The
terms of all such Restricted Stock awards shall be set forth in an Award
Agreement between the Corporation and the Participant which shall contain such
provisions, not inconsistent with this Plan, as shall be determined by the
Board.
(a) ISSUANCE OF RESTRICTED STOCK. As soon as practicable after the Date of
Grant of Restricted Stock, the Corporation shall cause to be transferred on the
books of the Corporation shares of Stock, registered on behalf of the
Participant, evidencing such Restricted Stock, but subject to forfeiture to the
Corporation retroactive to the Date of Grant if an Award Agreement delivered to
the Participant by the Corporation with respect to the Restricted Stock is not
duly executed by the Participant and timely returned to the Corporation. Unless
the Board determines otherwise, until the lapse or release of all restrictions
applicable to an award of Restricted Stock, the stock certificates representing
such Restricted Stock shall be held in custody by the Corporation or its
designee. Notwithstanding the foregoing, the Corporation may, in its sole
discretion, establish a trust for the purpose of holding Restricted Stock
awarded pursuant to this Plan. In the event that a trust is established, the
Corporation may elect to hold any or all shares of Stock subject to awards in
the name of the trust for the benefit of the Participant and subject to the
forfeiture conditions applicable to the award.
(b) SHAREHOLDER RIGHTS. Beginning on the Date of Grant of the Restricted
Stock and subject to execution of the Award Agreement as provided in Section
5(a), the Participant shall become a shareholder of the Corporation with respect
to all Stock subject to the Award Agreement and shall have all of the rights of
a shareholder, including, but not limited to, the right to vote such Stock and
the right to receive dividends and other distributions paid with respect to such
Stock; provided, however, that any Stock distributed as a dividend or otherwise
with respect to any Restricted Stock as to which the restrictions have not yet
lapsed shall be subject to the same restrictions as such Restricted Stock and
shall be held as prescribed in Section 5(a). Cash dividends paid with respect to
Restricted Stock may, at the Board's discretion, be held by the Corporation in
escrow until such time as the Participant vests in such shares or distributed to
the Participant during the forfeiture period. The Corporation may credit a
reasonable rate of interest to such cash dividends prior to distribution.
(c) RESTRICTION ON TRANSFERABILITY. None of the Restricted Stock may be
assigned, transferred (other than by will or the laws of descent and
distribution), pledged, sold or otherwise disposed of prior to lapse or release
of the restrictions applicable thereto.
(d) DELIVERY OF STOCK UPON RELEASE OF RESTRICTIONS. Upon expiration or
earlier termination of the forfeiture period without a forfeiture, and the
satisfaction of or release from any other conditions prescribed by the Board,
the restrictions applicable to the Restricted Stock shall lapse. As promptly as
administratively feasible thereafter, subject to the requirements of Section
6(b), the Corporation shall deliver to the Participant or, in case of the
Participant's death, to the Participant's legal representatives, one or more
stock certificates for the appropriate number of shares of Stock, free of all
such restrictions, except for any restrictions that may be imposed by law.
(e) TERMS OF RESTRICTED STOCK; FORFEITURE OF RESTRICTED STOCK. All
Restricted Stock shall be forfeited and returned to the Corporation and all
rights of the Participant with respect to such Restricted
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Stock shall cease and terminate in their entirety if during the forfeiture
restrictions the employment (or, in the case of a Director, service) of the
Participant with the Corporation and/or its subsidiaries terminates for any
reason. Subject to the terms of the Plan, the Board, in its sole discretion,
shall establish any forfeiture period for each grant of Restricted Stock, and
may provide for the forfeiture period to lapse in installments. Notwithstanding
the foregoing, upon the termination of a Participant's employment by reason of
death or Disability, all forfeiture restrictions imposed on Restricted Stock
shall immediately and fully lapse. In addition, upon the effective date of a
Change in Control, all forfeiture restrictions imposed on outstanding Restricted
Stock awards shall immediately and fully lapse.
SECTION 6. MISCELLANEOUS
(a) LIMITATIONS ON TRANSFER. The rights and interest of a Participant
under the Plan may not be assigned or transferred other than by will or the laws
of descent and distribution. During the lifetime of a Participant, only the
Participant personally may exercise rights under the Plan.
(b) TAXES. The Corporation shall be entitled to withhold (or secure
payment from the Participant in lieu of withholding) the amount of any
withholding or other tax required by law to be withheld or paid by the
Corporation with respect to any Stock issuable under this Plan, or with respect
to any income recognized upon the lapse of restrictions applicable to Restricted
Stock and the Corporation may defer issuance of Stock hereunder until and unless
indemnified to its satisfaction against any liability for any such tax. The
amount of such withholding or tax payment shall be determined by the Board or
its delegate and shall be payable by the Participant at such time as the Board
determines. To the extent authorized by the Board, such withholding obligation
may be satisfied by the payment of cash by the Participant to the Corporation,
the tendering of previously acquired shares of Stock of the Participant or the
withholding, at the appropriate time, of shares of Stock otherwise issuable to
the Participant, in a number sufficient, based upon the Fair Market Value of
such Stock, to satisfy such tax withholding requirements. The Board shall be
authorized, in its sole discretion, to establish such rules and procedures
relating to any such withholding methods as it deems necessary or appropriate,
including, without limitation, rules and procedures relating to elections by
Participants who are subject to the provisions of Section 16 of the Exchange
Act.
(c) ADJUSTMENTS TO REFLECT CAPITAL CHANGES. The amount and kind of Stock
available for issuance under the Plan and the limit on the number of shares of
Stock in respect of which awards may be made to any Participant in any calendar
year shall be appropriately adjusted to reflect any stock dividend, stock split,
combination or exchange of shares, merger, consolidation or other change in
capitalization with a similar substantive effect upon the Plan. The Board shall
have the power and sole discretion to determine the nature and amount of the
adjustment, if any, to be made pursuant to this Section 6(c).
(d) NO RIGHT TO AWARD; NO RIGHT TO EMPLOYMENT. No employee or other person
shall have any claim of right to be permitted to participate or be granted an
award under this Plan. Neither the Plan nor any action taken hereunder shall be
construed as giving any employee any right to be retained in the employ of the
Corporation.
(e) GOVERNING LAW. The Plan and all determinations made and actions taken
pursuant to the Plan shall be governed by the laws of the State of Delaware
other than the conflict of laws provisions of such laws, and shall be construed
in accordance therewith.
(f) CAPTIONS. The captions (i.e., all Section and subsection headings)
used in the Plan are for convenience only, do not constitute a part of the Plan,
and shall not be deemed to limit, characterize or affect in any way any
provisions of the Plan, and all provisions of the Plan shall be construed as if
no captions had been used in the Plan.
(g) SEVERABILITY. Whenever possible, each provision in the Plan and every
Award Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of the Plan or any Award Agreement
shall be held to be prohibited by or invalid under applicable law, then (x) such
provision shall be deemed amended to accomplish the objectives of the provision
as originally written to the fullest extent permitted by law and (y) all other
provisions of the Plan and every Award Agreement shall remain in full force and
effect.
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(h) LEGENDS. All certificates for Stock delivered under the Plan shall be
subject to such transfer restrictions set forth in the Plan and such other
restrictions as the Board may deem advisable under the rules, regulations and
other requirements of the Securities and Exchange Commission, any stock exchange
upon which the Stock is then listed and any applicable federal or state
securities law, and the Board may cause a legend or legends to be endorsed on
any such certificates making appropriate references to such restrictions.
(i) AMENDMENT AND TERMINATION.
(A) AMENDMENT. Subject to applicable law and regulations, the Board shall
have complete power and authority to amend the Plan at any time it is deemed
necessary or appropriate; provided, however, that no amendment shall be made
without shareholder approval if such approval is necessary for the Corporation
to comply with an applicable tax law or regulatory requirement. No termination
or amendment of the Plan may, without the consent of the Participant to whom any
award shall theretofore have been granted under the Plan, adversely affect the
right of such individual under such award.
(B) TERMINATION. The Board shall have the right and the power to terminate
the Plan at any time. Unless sooner terminated by action of the Board, the Plan
shall automatically terminate, without further action of the Board or the
Corporation's shareholders, on the tenth anniversary of the Effective Date. No
award shall be granted under the Plan after the termination of the Plan, but the
termination of the Plan shall not have any other effect and any award
outstanding at the time of the termination of the Plan shall continue in effect
in accordance with its terms as if the Plan has not terminated.
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Adopted by the Board of Directors on December 4, 1998.
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