EXHIBIT 4.0
PALFED, INC.
1993 RESTRICTED STOCK INCENTIVE AWARD PLAN
(As amended as of April 23, 1996)
1. PURPOSE OF THE PLAN. The PALFED, Inc. 1993 Restricted Stock
Incentive Award Plan (the "Plan") is intended to advance the interest of PALFED,
Inc. (the "Company") and its subsidiaries by providing an opportunity for
officers and other employees to acquire a greater equity interest in the
Company. The Plan is intended to enhance the ability of the Company and its
subsidiaries in recruiting and retaining officers and key employees, to provide
additional incentive compensation to such individuals, and to stimulate the
efforts of such employees and to strengthen their desire to remain in the employ
of the Company and its subsidiaries. The Plan provides for the grant of shares
of Company common stock (an "Award" or collectively, the "Awards") that are
subject to certain restrictions.
2. STOCK SUBJECT TO THE PLAN. The maximum number of shares of
common stock, $ 1.00 par value ("Common Stock"), of the Company that may be
issued under Awards granted under the Plan shall be a total of 200,000 shares of
Common Stock. If an Award expires, is cancelled, forfeited or terminated for
any reason, the shares of Common Stock subject to such Award shall again be
available for future Awards under this Plan. Common Stock awarded pursuant to
this Plan is hereinafter referred to as "Restricted Stock".
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a
committee of the Board of Directors consisting of not less than three (3)
directors who are "disinterested persons" within the meaning of Rule 16b-3
promulgated by the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). As used
herein, the term "Committee" refers to such committee or, in absence of
appointment of such committee, to the Board of Directors. Subject to the terms
of the Plan, the Committee shall have full authority in its discretion to
determine the officers or employees of the Company and its subsidiaries to whom
Awards shall be granted and the terms and provisions of Awards. In making such
determinations, the Committee may take into account the nature of the services
rendered and to be rendered by the respective officers and employees, their
present and potential contributions to the Company and any other factors that
the Committee deems relevant. The Committee may also make the issuance or
exercise of Awards subject to the satisfaction of specified financial
performance goals established by the Committee in its discretion. Subject to
the provisions of the Plan, the Committee shall have full and conclusive
authority to interpret and construe the terms and intent of the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the respective Restricted Stock agreements
(which need not be identical); and to make all other determinations necessary or
advisable for the proper administration of the Plan.
4. ELIGIBILITY AND LIMITS. Awards may be granted only to officers
and other employees of the Company and its present or future subsidiaries who
are employed by the Company or one of its subsidiaries. The term "subsidiary",
as used in this Plan, shall mean any corporation or other business organization
in which the Company owns, directly or indirectly, fifty percent (50%) or more
of the voting stock or capital stock at the time of the granting of such Award.
No employee shall acquire pursuant to Awards granted under the Plan more than
one-third of the aggregate number of shares of Restricted Stock issuable
pursuant to Awards under the Plan.
5. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS. Subject to the
following terms and conditions, Awards shall be evidenced by Restricted Stock
agreements ("Agreements") executed by the Company and the employee receiving the
Award (the "Recipient") in such form and not inconsistent with the Plan as the
Committee shall approve from time to time.
(a) RESTRICTED PERIOD. Shares of Restricted Stock awarded pursuant
to an Award shall be subject to such conditions, terms and restrictions
(including performance goals, forfeiture and transfer) and for such period or
periods as shall be determined by the Committee. In each Agreement, the
Recipient shall agree to remain in the employment of the Company or one of its
subsidiaries for a specified period, which shall be at least one (1) year from
the date of the Award, at the pleasure of the Company. In the event that a
Recipient is permanently separated from the Company for any reason within the
period of time stated in an Agreement, the Restricted Stock shall be forfeited.
Notwithstanding the foregoing, the Committee shall have the power to permit, in
its discretion, an acceleration of the expiration of the applicable restriction
period with respect to any part or all of the shares awarded to a Recipient.
(b) RESTRICTIONS ON TRANSFER. Shares of Restricted Stock awarded,
and the right to vote such shares and to receive dividends thereon, may not be
sold, assigned, transferred, pledged or otherwise encumbered, during the
restriction period applicable to such shares. Notwithstanding the foregoing,
and except as otherwise provided in this Plan or an Agreement, the Recipient
shall have all other rights of a shareholder, including, but not limited to, the
right to receive dividends and the right to vote such shares.
(c) CERTIFICATES. Each certificate issued in respect of shares of
Restricted Stock awarded to a Recipient shall be registered in the name of such
Recipient and deposited with the Company, or its designee, and shall bear the
following legend:
"This certificate and the shares of common stock represented
hereby are subject to the terms and conditions (including
forfeiture and restrictions against transfer) contained in
the PALFED, Inc. Restricted Stock Incentive Award Plan and
an Agreement entered into between PALFED, Inc. and the
registered owner. Release from such terms and conditions
shall be obtained only in accordance with the provisions of
the Plan and Agreement, copies of which are on file in the
office of the Secretary of PALFED, Inc., Aiken, South
Carolina."
(d) APPLICABILITY OF RESTRICTIONS TO ADDITIONAL SECURITIES. Any
shares of Restricted Stock or other securities of the Company or any other
entity which are issued as a distribution on, or in exchange for, Restricted
Stock or into which Restricted Stock is converted as a result of a
recapitalization, stock dividend, distribution of securities, stock split or
combination of shares or a merger, consolidation or sale of substantially all of
the assets of the Company shall be subject to the restrictions set forth in the
Agreement, which shall inure to the benefit of any surviving or successor
corporation which is the issuer of such securities. The certificates
representing any such shares or other securities shall bear a legend
substantially in the form prescribed in section 5(d) with such changes as may be
appropriate in the context.
(e) SECTION 83(b) ELECTION. Each Agreement shall provide that the
Recipient may not elect to pay taxes under Section 83(b) of the Internal Revenue
Code of 1986, as amended (the "Code").
(f) LAPSE OF RESTRICTIONS. Each Agreement shall specify the
condition and terms upon which any restrictions upon shares under this section 5
shall lapse, as determined by the Committee. Notwithstanding the restrictions
set forth in this section 5 or in any Agreement, all restrictions on any
outstanding shares of Restricted Stock shall lapse, without regard to the date
of grant of an Award, if: (i) a tender offer or exchange offer has been made
for at least twenty-five percent (25%) of the outstanding shares
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of Common Stock, other than one made by the Company, provided that the
corporation, person or other entity making such offer purchases or otherwise
acquires shares of Common Stock pursuant to such offer; or (ii) the shareholders
of the Company have approved a definitive agreement to merge or consolidate with
or into another corporation pursuant to which the Company will not survive or
will survive only as a subsidiary of another corporation or to sell or otherwise
dispose of all or substantially all of its assets; or (iii) any person, entity
or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act
(excluding for purposes of this section any employee benefit plan of the Company
which acquires beneficial ownership of voting securities of the Company) becomes
the holder of twenty-five percent (25%) or more of the outstanding shares of
Stock. Upon the lapse of such restrictions, certificates of shares of
Restricted Stock free of any restrictive legend shall be delivered to the
Recipient or his legal representative.
6. FORFEITURE OF AWARDS. If a Recipient terminates employment for
any reason, including, but not limited to, termination by the Company, with or
without cause, then all shares of Restricted Stock which are then held by the
Recipient shall thereupon automatically be forfeited to the Company. For
purposes of this section 6, a Recipient shall not be considered to have
terminated employment if he or she is employed by the Company or any of its
subsidiaries or if the Recipient is on a leave of absence under circumstances
which the Committee or the Board of Directors determines should not result in a
forfeiture under this Plan.
7. CHANGES IN CAPITALIZATION. In the event of any change in the
outstanding shares of Common Stock that occurs after ratification of the Plan by
the shareholders of the Company by reason of a stock dividend or split,
recapitalization, merger, consolidation, combination, exchange of shares, or
other similar corporate change, the aggregate number of shares of Restricted
Stock subject to each outstanding Award shall be appropriately adjusted by the
Committee, whose determination shall be conclusive.
8. AMENDMENTS, MODIFICATIONS AND TERMINATION OF PLAN. The Board or
the Committee may terminate the Plan, in whole or in part, may suspend the Plan,
in whole or in part from time to time, and may amend the Plan from time to time,
including the adoption of amendments deemed necessary or desirable to qualify
the Awards under the laws of various states (including tax laws) and under laws
and regulations promulgated by the SEC with respect to employees who are subject
to the provisions of Section 16 of the Exchange Act, or to correct any defect or
supply an omission or reconcile any inconsistency in the Plan or in any Award
granted thereunder, without the approval of the shareholders of the Company;
provided, however, that no action shall be taken without the approval of the
shareholders of the Company which may increase the number of shares of Common
Stock available for Awards or withdraw administration from the Committee, or
permit any person while a member of the Committee to be eligible to receive an
Award. Without limiting the foregoing, the Board of Directors or the Committee
may make amendments applicable or inapplicable only to Recipients who are
subject to Section 16 of the Exchange Act. No amendment or termination or
modification of the Plan shall in any manner affect Awards theretofore granted
without the consent of the Recipient unless the Committee has made a
determination that an amendment or modification is in the best interest of all
Recipients to whom Awards previously have been granted. The Board or the
Committee may modify or remove restrictions on an Award or the Awards as a whole
which have been previously granted. Unless earlier terminated by the Board or
the Committee, the Plan shall terminate when (a) all Awards authorized under the
Plan have been granted, and (b) all shares of Restricted Stock subject to Awards
under the Plan have been issued and are no longer subject to forfeiture.
9. MISCELLANEOUS.
(a) NO RIGHT TO EMPLOYMENT. No person shall have any claim or right
to be granted an Award, and the grant of an Award shall not be construed as
giving any Recipient the right to continued employment. Nothing contained in
the Plan or in any Award granted under the Plan shall confer upon any Recipient
any right with respect to the continuation of his or her employment by the
Company or a subsidiary
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corporation or interfere in any way with the right of the Company or a
subsidiary corporation, subject to the terms of any separate employment
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the Recipient from the rate in
existence at the time of the grant of an Award.
(b) WITHHOLDING. Whenever the Company proposes or is required to
issue or transfer shares of Common Stock under this Plan or to issue shares free
of restrictions in accordance with section 5(f), the Company shall have the
right to require the Recipient to remit to the Company an amount sufficient to
satisfy any federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares.
(c) NO FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued under the Plan and cash shall be paid in lieu of any fractional
shares in settlement of Awards granted under the Plan.
(d) GOVERNING LAW. The provisions of the Plan shall be governed by
and interpreted in accordance with the laws of the State of South Carolina.
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