REGISTRATION STATEMENT NO. 333-_____
Filed July 14, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
MITCHELL BANCORP, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1966011
- ------------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
210 Oak Avenue
Spruce Pine, North Carolina 28777
(704) 765-7324
(Address of principal executive offices)
1996 Stock Option Plan
1996 Management Recognition and Development Plan
------------------------------------------------
(Full title of the Plan)
Edward Ballew, Jr. Copies to:
Chief Executive Officer Eric S. Kracov, Esquire
Mitchell Bancorp, Inc. Breyer & Aguggia
210 Oak Avenue 1300 I Street, N.W.
Spruce Pine, North Carolina 28777 Suite 470 East
(704) 765-7324 Washington, D.C. 20005
Name, address and telephone (202) 737-7900
number of agent for service
Page 1 of 7 Pages
Index to Exhibits Appears on Page 4.
Calculation of Registration Fee
- ------------------------------------------------------------------------------
Title of
Securities Amount Proposed Maximum Proposed Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee
- ------------------------------------------------------------------------------
Common Stock,
$.01 par
value 137,186 $16.56(2) $2,271,800 $688
- ------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the amount of the
registration fee. Pursuant to Rule 457(c) under the Securities Act of
1933, as amended (the "Securities Act"), the price per share is estimated
to be $16.56, based upon the average of the bid and ask prices of the
common stock, $.01 par value per share (the "Common Stock"), of Mitchell
Bancorp, Inc. (the "Registrant"), as reported on the National Daily
Quotation System "Pink Sheets" July 11, 1997, the last day the stock
traded.
(2) Of this number, 97,990 shares are being registered for issuance under the
1996 Stock Option Plan and 39,196 shares are being registered for
issuance under the 1996 Management Recognition and Development Plan (the
foregoing plans are referred to collectively herein as the "Plans");
together with an indeterminate number of shares reserved for issuance
pursuant to the Plans as a result of any future stock split, stock
dividend or similar adjustment of the outstanding Common Stock.
---------------------------
This Registration Statement shall become effective automatically upon
the date of filing in accordance with Section 8(a) of the Securities Act of
1933, as amended, and 17 C.F.R. Section 230.462.
-2-
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
- ------
The following documents filed with the Commission are incorporated in
this Registration Statement by reference:
(1) the Company's Registration Statement on Form SB-2 (File No. 333-
1888), filed March 1, 1996;
(2) the description of the Common Stock set forth in the Company's
Registration Statement on Form 8-A registering the Company's Common Stock,
pursuant to Section 12(g) of the Securities Exchange Act of 1934, filed May 3,
1996; and
(3) the Company's Annual Report on Form 10-KSB for the year ended
June 30, 1996.
All other reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Exchange Act, after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities covered hereby then
remaining unsold, shall also be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
Any statement contained in this Registration Statement, or in a document
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Registration Statement to
the extent that a statement contained herein, or in any other subsequently
filed document which also is or is deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
Item 4. Description of Securities
- ------
Not Applicable
Item 5. Interests of Named Experts and Counsel
- ------
Not Applicable
Item 6. Indemnification of Directors and Officers
- ------
Section 55-8-57 of the North Carolina Business Corporation Act sets
forth circumstances under which directors, officers, employees and agents may
be insured or indemnified against liability which they incur in their
capacities.
Article XIV of the Registrant's Articles of Incorporation provides for
indemnification of any director, officer, employee and agent of the Registrant
against liability and litigation expense arising out of such status or
activities in such capacity. "Liability and litigation expense" shall include
costs and expenses of litigation (including reasonable attorneys' fees),
judgments, fines and amounts paid in settlement which are actually and
reasonably incurred in connection with or as a consequence of any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, including appeals.
-3-
Item 7. Exemption From Registration Claimed
- ------
Not Applicable
Item 8. Exhibits
- ------
The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8:
No. Exhibit
-- -------
5 Opinion of Breyer & Aguggia
23.1 Consent of Crisp Hughes & Co., L.L.P.
23.2 Consent of Breyer & Aguggia (see Exhibit 5)
24 Power of attorney (see signature pages)
99.1 1996 Stock Option Plan
99.2 1996 Management Recognition and Development Plan
Item 9. Undertakings
- ------
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act, (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration Statement, and (iii)
to include any material information with respect to the plan of distribution
not previously disclosed in the Registration Statement or any material change
in such information in the Registration Statement; provided, however, that
clauses (i) and (ii) do not apply if the information required to be included
in a post-effective amendment by those clauses is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
2. That, for the purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed the initial bona fide
offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
4. That, for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and that
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
-4-
persons of the registrant pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by the Registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the questions whether such indemnification by it is
against public policy expressed in the Securities Act will and will be
governed by the final adjudication of such issue.
-5-
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Mitchell
Bancorp, Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of Spruce Pine, and State of North Carolina the
10th day of July 1997.
MITCHELL BANCORP, INC.
By: /s/ Edward Ballew, Jr.
---------------------------------
Edward Ballew, Jr.
Executive Vice President, Chief
Executive Officer and Director
(Principal Executive Officer)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby makes, constitutes and appoints Edward Ballew, Jr. his true and
lawful attorney, with full power to sign for such person and in such person's
name and capacity indicated below, and with full power of substitution any and
all amendments to this Registration Statement, hereby ratifying and confirming
such person's signature as it may be signed by said attorney to any and all
amendments.
By:/s/ Edward Ballew, Jr. Date: July 10, 1997
-------------------------------------
Edward Ballew, Jr.
Executive Vice President, Chief
Executive Officer and Director
(Principal Executive Officer)
By:/s/ Emma Lee M. Wilson Date: July 10, 1997
-------------------------------------
Emma Lee M. Wilson
Assistant Managing Officer, Secretary,
Treasurer and Director (Principal
Financial and Accounting Officer)
By:/s/ Calvin F. Hall Date: July 10, 1997
-------------------------------------
Calvin F. Hall
President and Director
By:/s/ Baxter D. Johnson Date: July 10, 1997
-------------------------------------
Baxter D. Johnson
Director
By:/s/ Lloyd Hise, Jr. Date: July 10, 1997
-------------------------------------
Lloyd Hise, Jr.
Director
-6-
Exhibit 5
Opinion of Breyer & Aguggia
1300 I Street, N.W.
Suite 470 East
Washington, D.C. 20005
Telephone (202) 737-7900
Breyer & Aguggia Facsimile (202) 737-7979
==============================================================================
July 14, 1997
Board of Directors
Mitchell Bancorp, Inc.
210 Oak Avenue
Spruce Pine, North Carolina 28777
Gentlemen:
We have acted as special counsel to Mitchell Bancorp, Inc., a North
Carolina corporation (the "Corporation"), in connection with the preparation
and filing with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, of a Registration Statement on Form S-8
(the "Registration Statement"), relating to the registration of up to 137,186
shares of Corporation common stock, $.01 par value per share ("Common Stock"),
to be issued pursuant to (i) the Corporation's 1996 Stock Option Plan (the
"Option Plan") upon the exercise of stock options ("Option Rights") and (ii)
the Corporation's 1996 Management Recognition and Development Plan (the
"MRDP"). The Registration Statement also registers an indeterminate number of
additional shares which may be necessary under the Option Plan and the MRDP to
adjust the number of shares reserved for issuance as a result of a stock
split, stock dividend or similar adjustment of the outstanding Common Stock of
the Corporation. We have been requested by the Corporation to furnish an
opinion to be included as an exhibit to the Registration Statement.
We have reviewed the Registration Statement, the Articles of
Incorporation and Bylaws of the Corporation, the Plan, a specimen stock
certificate evidencing the Common Stock of the Corporation and such other
corporate records and documents as we have deemed appropriate for the purpose
of rendering this opinion. We are relying upon the originals, or copies
certified or otherwise identified to our satisfaction, of the corporate
records of the Corporation and such other instruments, certificates and
representations of public officials, officers and representatives of the
Corporation as we have deemed appropriate or relevant as a basis for the
opinion set forth below. In addition, we have assumed, without independent
verification, the genuineness of all signatures and the authenticity of all
documents furnished to us and the conformity in all respects of copies to
originals.
Board of Directors
July 14, 1997
Page 2
For purposes of this opinion, we have also assumed that (i) the shares
of Common Stock issuable pursuant to Option Rights granted under the terms of
the Plan will continue to be validly authorized on the dates the Common Stock
is issued pursuant to the Option Rights; (ii) on the dates the Option Rights
are exercised, the Option Rights granted under the terms of the Plan will
constitute valid, legal and binding obligations of the Corporation and will
(subject to applicable bankruptcy, moratorium, insolvency, reorganization and
other laws and legal principles affecting the enforceability of creditors'
rights generally) be enforceable as to the Corporation in accordance with
their terms; (iii) no change occurs in applicable law or the pertinent facts;
and (iv) the provisions of "blue sky" and other securities laws as may be
applicable have been complied with to the extent required.
Based upon the foregoing, and subject to the qualifications and
assumptions set forth herein, we are of the opinion as of the date hereof that
the shares of Common Stock to be issued pursuant to the Option Plan and the
MRDP, when issued pursuant to and in accordance with the Registration
Statement, the Option Plan and the MRDP and, with respect to the Option Plan,
upon receipt of the consideration required thereby, will be legally issued,
fully paid and non-assessable shares of Common Stock of the Corporation.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ Breyer & Aguggia
BREYER & AGUGGIA
Exhibit 23.1
Consent of Independent Auditors
CRISP
HUGHES
------& CO., L.L.P.------
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
Independent Auditors' Consent
-----------------------------
The Board of Directors
Mitchell Bancorp, Inc.
We consent to incorporation by reference in the registration statement on Form
S-8 of Mitchell Bancorp, Inc., of our report dated July 12, 1996, relating to
the consolidated balance sheets of Mitchell Bancorp, Inc., and subsidiary as
of June 30, 1995 and 1996, and the related consolidated statements of income,
stockholders' equity, and cash flows for the years then ended, which report
appears in the June 30, 1996, Annual Report on Form 10-KSB of Mitchell
Bancorp, Inc.
/s/ Crisp Hughes & Co., L.L.P.
- --------------------------------
CRISP HUGHES & CO., L.L.P.
Asheville, North Carolina
July 10, 1997
32 Orange Street - P.O. Box 3049 - Asheville, North Carolina 28802
(704) 254-2254 - FAX (704) 254-6859
Exhibit 23.2
Consent of Breyer & Aguggia (see Exhibit 5)
Exhibit 24
Power of Attorney (see signature page)
Exhibit 99.1
1996 Stock Option Plan
Mitchell Bancorp, Inc.
1996 Stock Option Plan
SECTION 1. Purpose. The purposes of the Mitchell Bancorp, Inc. 1996 Stock
Option Plan are to promote the interests of the Company, its affiliates, and
its stockholders by (i) attracting and retaining exceptional executive
personnel and other key employees and directors of the Company and its
affiliates; (ii) motivating such employees and Eligible Directors by means of
performance-related incentives to achieve longer-range performance goals; and
(iii) enabling such employees and Eligible Directors to participate in the
long-term growth and financial success of the Company.
SECTION 2. Definitions. As used in the Plan, the following terms shall have
the meanings set forth below:
"Affiliate" shall mean the Bank and any other "subsidiary" of the
Company as defined in Section 424(f) of the Code.
"Award" shall mean any grant of Options or Director Options.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Bank" shall mean Mitchell Savings Bank, SSB, Spruce Pine, North
Carolina.
"Board" shall mean the Board of Directors of the Company.
"Change in Control" shall mean an event deemed to occur if and when (a)
an offeror other than the Company purchases shares of the common stock of the
Company or the Bank 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 Company or the Bank representing twenty-five percent (25%)
or more of the combined voting power of the Company's or the Bank's then
outstanding securities, (c) the membership of the board of directors of the
Company or the Bank 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 Company or the Bank approve a merger, consolidation, sale
or disposition of all or substantially all of the Company's or the Bank's
assets, or a plan of partial or complete liquidation. If any of the events
enumerated in clauses (a) - (d) occur, the Board shall determine the effective
date of the change in control resulting therefrom, for purposes of the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean a committee of the Board consisting of at least
two nonemployee directors designated by the Board to administer the Plan. If
a separate committee is not so designated, the Board shall serve as the
Committee for all purposes under the Plan.
"Company" shall mean Mitchell Bancorp, Inc., a North Carolina
corporation.
"Director Option" shall mean a Non-Qualified Stock Option granted to an
Eligible Director pursuant to Section 6(e).
"Disability" shall have the meaning set forth in Section 22(e)(3) of the
Code. For purposes of the Plan, all determinations as to whether a
Participant has become disabled shall be made by a majority of the Board upon
the basis of
such evidence as it deems necessary or desirable, and shall be final and
binding on all interested persons.
"Effective Date" shall mean the date specified in Section 9(a) of the
Plan.
"Eligible Director" shall mean, on any date, a person who is serving as
a member of the Board but shall not include a person who is an Employee.
"Employee" shall mean an employee of the Company or any Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall be determined as follows:
(a) If the Shares are traded or quoted on the Nasdaq Stock Market or
other national securities exchange at the time of grant of the
Award, then the Fair Market Value shall be the average of the
highest and lowest selling price on such exchange on the date such
Award is granted 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 Shares are 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 Committee in good faith on such
basis as it deems appropriate.
"Incentive Stock Option" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to
meet the requirements of Section 422 of the Code or any successor provision
thereto.
"Non-Qualified Stock Option" shall mean a right to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is not
intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option but shall not include a Director Option.
"Participant" shall mean any Employee or Eligible Director selected by
the Committee to receive an Award of Options or Director Options, as
appropriate.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
government or political subdivision thereof or other entity.
"Plan" shall mean the Mitchell Bancorp, Inc. 1996 Stock Option Plan.
"Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by the
SEC under the Exchange Act, or any successor rule or regulation thereto as in
effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto and shall include the staff thereof.
"Shares" shall mean common shares of the Company, or such other
securities of the Company as may be designated by the Committee from time to
time.
"Ten Percent Stockholder" shall mean any stockholder who, at the time an
Incentive Stock Option is granted to such stockholder, owns (within the
meaning of Section 424(d) of the Code) more than ten percent (10%) of the
voting power of all classes of stock of the Company.
- 2 -
"Termination for Cause" shall mean termination because of a
Participant's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses) or material breach of any provision of
any employment agreement between the Company and/or, the Bank and a
Participant.
SECTION 3. Administration.
(a) The Plan shall be administered by the Committee. Subject to the
terms of the Plan and applicable law, and in addition to other express powers
and authorizations conferred on the Committee by the Plan, the Committee
shall: (i) designate Participants; (ii) determine the type or types of Awards
to be granted to an eligible Employee; (iii) determine the number of Shares to
be covered by, or with respect to which payments, rights, or other matters are
to be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited, or
suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property,
and other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (viii) establish, amend, suspend,
or waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (ix) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan.
(b) Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee,
may be made at any time and shall be final, conclusive, and binding upon all
Persons, including the Company, and Participant, any holder or beneficiary of
any Award, any shareholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section
4(b), the number of Shares with respect to which Options and Director Options
may be granted under the Plan shall be 97,990. If, after the effective date
of the Plan, any Shares covered by an Option or Director Option granted under
the Plan, or to which such an Option or Director Option relates, are
forfeited, or if an Option or Director Option otherwise terminates or is
canceled without the delivery of Shares, then the Shares covered by such
Option or Director Option, or to which such Option or Director Option relates,
or the number of Shares otherwise counted against the aggregate number of
Shares with respect to which Options and Director Options may be granted, to
the extent of any such settlement, forfeiture, termination or cancellation,
shall again be, or shall become, Shares with respect to which Options and
Director Options may be granted. In the event that any Option or Director
Option is exercised through the delivery of Shares, the number of Shares
available for Awards under the Plan shall be increased by the number of Shares
surrendered.
(b) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is
necessary in order to prevent dilution or enlargement of the benefits or
potential benefits
- 3 -
intended to be made available under the Plan, then the Committee shall
proportionately adjust any or all (as necessary) of (i) the number of Shares
or other securities of the Company (or number and kind of other securities or
property) with respect to which Awards may be granted, (ii) the number of
Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Awards, and (iii) the grant or
exercise price with respect to any Award; provided, in each case, that with
respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code, as from time to time amended.
(c) Sources of Shares. Any Shares delivered pursuant to an Option or
Director Option may consist, in whole or in part, of authorized and unissued
Shares or of treasury Shares.
SECTION 5. Eligibility. An Employee, including any officer or
employee-director of the Company, shall be eligible to be designated a
Participant. Each Eligible Director shall be eligible to receive Director
Options in accordance with Section 6(e) hereof.
SECTION 6. Options and Director Options.
(a) Grant. Subject to the provisions of the Plan and the
recommendation of the Board, the Committee shall determine the Employees to
whom Options shall be granted, the number of Shares to be covered by each
Option, the option price therefor and the conditions and limitations
applicable to the exercise of the option. The Committee shall have the
authority to grant Incentive Stock Options, or to grant Non-Qualified Stock
Options, or to grant both types of options. In such case of Incentive Stock
Options, the terms and conditions of such grants shall be subject to and
comply with such rules as may be prescribed by Section 422 of the Code, as
from time to time amended, and any regulations implementing such statute,
including without limitation, the requirements of Code Section 422(d), which
limits the aggregate fair market value of Shares of which Incentive Stock
Options are exercisable for the first time to one hundred thousand dollars
($100,000) per calendar year. Each provision of the Plan and of each written
option agreement relating to an Option designated an Incentive Stock Option
shall be construed so that such Option qualifies as an Incentive Stock Option,
and any provision that cannot be so construed shall be disregarded.
(b) Exercise Price. The Committee shall establish the exercise price
at the time each Option or Director Option is granted, which price shall not
be less than one hundred percent (100%) of the per Share Fair Market Value on
the date of grant. Notwithstanding any provision contained herein, in the
case of an Incentive Stock Option, the exercise price at the time such
Incentive Stock Option is granted to any Employee who, at the time of such
grant, is a Ten Percent Stockholder, shall not be less than one hundred ten
percent (110%) of the per Share Fair Market Value on the date of grant.
(c) Exercise. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter; provided,
however, that in the case of an Incentive Stock Option, a Participant may not
exercise such Option as an Incentive Stock Option after the earlier of (i) the
date which is ten (10) years (five (5) years in the case of a Participant who
is a Ten Percent Stockholder) after the date on which such Incentive Stock
Option is granted, or (ii) the date which is three (3) months (twelve (12)
months in the case of a Participant who becomes Disabled, or who dies) after
the date on which he ceases to be an employee of the Company or an Affiliate;
provided, further, that no Award of Options under the Plan shall vest more
rapidly than ratably over a five (5) year period whereby twenty percent (20%)
of the Award shall vest on each of the first through the fifth anniversaries
of the date of grant so long as the Participant remains an Employee of the
Company or an Affiliate; provided,
- 4 -
further, that an Award of Options shall be one hundred percent (100%) vested
upon a Participant's death or Disability. In the event of an Employee's
Termination for Cause, his Options shall be canceled on the date he ceases to
be an Employee. The Committee may impose such conditions with respect to the
exercise of Options, including without limitation, any relating to the
application of federal or state securities laws, as it may deem necessary or
advisable.
(d) Payment. No Shares shall be delivered pursuant to any exercise of
an Option or Director Option until payment in full of the option price
therefor is received by the Company. Such payment may be made in cash or its
equivalent, or, if and to the extent permitted by the Committee, by exchanging
Shares owned by the optionee (which are not the subject of any pledge or other
security interest), or by a combination of the foregoing, provided that the
combined value of all cash and cash equivalents and the Fair Market Value of
any such Shares so tendered to the Company as of the date of such tender is at
least equal to such option price. The Committee may, in its discretion,
arrange procedures for the payment of the exercise price with one or more
stock brokerage firms for the purpose of allowing a Participant to make a
"cashless exercise" of an Option or Director Option.
(e) Director Options. Subject to the provisions of the Plan and the
recommendation of the Board, the Committee shall determine the Eligible
Directors to whom Director Options shall be granted, the number of shares to
be covered by each Director Option and the condition and limitations
applicable to the exercise of each Director Option. Each Award of Director
Options shall vest ratably over a five (5) year period whereby twenty percent
(20%) of the Award shall vest on each of the first through the fifth
anniversaries of the date of grant so long as the Eligible Director continues
to serve as a member of the Board; provided, however, that the Award shall be
one hundred percent (100%) vested in the event of the Eligible Director's
death or Disability. A Director Option shall be exercisable until the earlier
to occur of the following two (2) dates (i) the tenth anniversary of the date
of grant of such Director Option or (ii) one (1) year (two (2) years in the
case of an Eligible Director who becomes Disabled, or who dies) after the date
the Eligible Director ceases to be a member of the Board, except that if the
Eligible Director ceases to be a member of the Board upon Termination for
Cause, his Director Option shall be canceled on the date he ceases to be a
member of the Board. An Eligible Director may pay the exercise price of a
Director Option in the manner described in Section 6(d).
(f) Effect of a Change in Control. In the event of a Change in
Control, all then outstanding Options and Director Options, shall become one
hundred percent (100%) vested and exercisable as of the effective date of the
Change in Control. If, in connection with or as a consequence of a Change in
Control, the Company or the Bank is merged into or consolidated with another
corporation, or if the Company or the Bank sells or otherwise disposes of
substantially all of its assets to another corporation, then unless provisions
are made in connection with such transaction for the continuance of the Plan
and/or the assumption or substitution of then outstanding Options and Director
Options with new options covering the stock of the successor corporation, or
parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices, such Options or Director Options shall be
canceled as of the effective date of the merger, consolidation, or sale and
the Participant or Eligible Director shall be paid in cash an amount equal to
the difference between the Fair Market Value of the Shares subject to the
Options or Director Options as of the effective date of the such corporate
event and the exercise price of the Options or Director Options, as
appropriate.
(g) Limitation on Awards. Notwithstanding anything herein to the
contrary, (i) no Employee shall receive an Award covering in excess of twenty
five percent (25%), (ii) no Eligible Director shall receive an Award covering
in excess of five percent (5%) and (iii) Eligible Directors shall not receive
Awards
- 5 -
covering in excess of thirty percent (30%) in the aggregate, of the number of
shares reserved for issuance under the Plan.
SECTION 7. Amendment and Termination.
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without shareholder approval if such approval is
necessary to comply with any tax or regulatory requirement with which the
Committee deems it necessary or appropriate to comply.
(b) Amendments to Awards. The Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively;
provided, however, that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would impair the rights of
any Participant or any holder or beneficiary of any Award theretofore granted
shall not to that extent be effective without the consent of the affected
Participant, holder or beneficiary.
(c) Cancellation. Any provision of this Plan or any Award Agreement
to the contrary notwithstanding, the Committee may cause any Award of Options
granted hereunder to be canceled in consideration of the granting to the
holder of an alternative Award of Options having a Fair Market Value equal to
the Fair Market Value of such canceled Award.
SECTION 8. General Provisions.
(a) Nontransferability.
(i) Each Award, and each right under any Award, shall be
exercisable only by the Participant during his lifetime, or, if permissible
under applicable law, by the Participant's guardian or legal representative or
a transferee receiving such Award pursuant to a domestic relations order or
Section 8(a)(ii) as determined by the Committee.
(ii) No Award may be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by a Participant otherwise than by will
or by the laws of descent and distribution or pursuant to a domestic relations
order, and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the
Company; provided, however, that the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance. Notwithstanding the preceding sentence, the Committee shall have
discretionary authority to permit the transfer of any Non-Qualified Stock
Option to members of a Participant's immediate family, including trusts for
the benefit of such family members and partnerships in which such family
members are the only partners; provided, however, that a transferred
Non-Qualified Stock Option may be exercised by the transferee on any date only
to the extent that the Participant would have been entitled to exercise the
Non-Qualified Stock Option on such date had the Non-Qualified Stock Option not
been transferred. Any transferred Non-Qualified Stock Option shall remain
subject to the terms and conditions of the Participant's Award Agreement.
(b) No Rights to Awards. No Employee, Participant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the
same with respect to each recipient.
- 6 -
(c) Share Certificates. All Shares or other securities of the Company
delivered under the Plan pursuant to any Award or the exercise thereof shall
be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules, regulations, and
other requirements of the SEC, any stock exchange or national securities
association upon which such Shares or other securities are then listed, and
any applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any certificates representing such Shares or other
securities to make appropriate reference to such restrictions.
(d) Delegation. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers or managers of the Company,
or to a committee of such officers or managers, the authority, subject to such
terms and limitations as the Committee shall determine, to grant Awards to, or
to cancel, modify or waive rights with respect to, or to alter, discontinue,
suspend, or terminate Awards held by, Employees who are not officers or
directors of the Company for purposed of Section 16 of the Exchange Act, or
any successor section thereto, or who are otherwise not subject to such
Section.
(e) Withholding. A Participant shall be required to pay to the
Company and the Company is hereby authorized to withhold from any Award, from
any payment due or transfer made under any Award or from any compensation or
other amount owing to a Participant the amount of any applicable withholding
taxes in respect of an Award, its exercise, or any payment or transfer under
an Award and to take such other action as may be necessary in the opinion of
the Company to satisfy all obligations for the payment of such taxes,
including, but not limited to, the withholding of the issuance of Shares to be
issued upon the exercise of any Option or Director Option until the
Participant reimburses the Company for any amount required to be withheld.
(f) Award Agreements. Each Award hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto.
(g) No Limit on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other compensation arrangements, which may, but need not,
provide for the grant of options, restricted stock, Shares and other types of
Awards provided for hereunder (subject to shareholder approval if such
approval is required), and such arrangements may be either generally
applicable or applicable only in specific cases.
(h) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of
the Company or an Affiliate. Further, the Company may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provide in the Plan or in any Award
Agreement.
(i) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he has become the holder of such Shares.
(j) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan and any Award Agreement
shall be determined in accordance with the laws of the State of North
Carolina, without giving effect to the choice of law principles thereof.
(k) Severability. If any provisions of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall
be construed or
- 7 -
deemed amended to conform to the applicable laws, or if it cannot be construed
or deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(l) Other Laws. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or such
other consideration might violate any applicable law or regulation or entitle
the Company to recovery under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary
in connection with the exercise of such Award shall be promptly refunded to
the relevant Participant, holder or beneficiary. Without limiting the
generality of the foregoing, no Award granted hereunder shall be construed as
an offer to sell securities of the Company, and no such offer shall be
outstanding, unless and until the Committee in its sole discretion has
determined that any such offer, if made, would be in compliance with all
applicable requirements of the U.S. federal securities laws.
(m) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments
from the Company pursuant to an Award, such rights shall be no greater than
the right of any unsecured general creditor of the Company.
(n) Rule 16b-3 Compliance. With respect to persons subject to Section
16 of the Exchange Act, transactions under this Plan are intended to comply
with all applicable terms and conditions of Rule 16b-3 and any successor
provisions. To the extent that any provision 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.
(o) Headings. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
(p) No Impact on Benefits. Unless specifically provided under any
other benefit plan of the Company or its Affiliates, Awards shall not be
treated as compensation for purposes of calculating an Employee's or Eligible
Director's rights under such benefit plans.
(q) Indemnification. Each person who is or shall have been a member
of the Committee or of the Board shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be made a party or
in which he may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company's approval, or paid by him in
satisfaction of any judgement in any such action, suit, or proceeding against
him, provided he shall give the Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it on his
own behalf. The foregoing right of indemnification shall not be exclusive and
shall be independent of any other rights of indemnification to which such
persons may be entitled under the Company's articles of incorporation or
bylaws, by contract, as a matter of law, or otherwise.
- 8 -
SECTION 9. Term of the Plan.
(a) Effective Date. The Plan shall become effective on July 13, 1997
but only if, prior to such date, the Plan is approved by a majority of the
Company's stockholders at an annual or special meeting of stockholders of the
Company held not less than six (6) months after the date of consummation of
the Company's mutual-to-stock conversion nor more than twelve (12) months
after the date of adoption of the Plan by the Board.
(b) Expiration Date. The Plan shall terminate on and no Award shall
be granted under the Plan after the tenth anniversary of the Effective Date.
Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Award or to waive any conditions or rights under any such Award shall,
continue after the tenth anniversary of the Effective Date.
- 9 -
Exhibit 99.2
1996 Management Recognition and Development Plan
Mitchell Bancorp, Inc.
1996 Management Recognition and Development Plan
1. Purpose; Definitions.
The purpose of the Plan is to increase the proprietary and vested
interest of the key Employees and Eligible Directors of the Company and its
Affiliates in the growth, development and financial success of the Company and
its Affiliates by granting them awards of Restricted Shares.
Whenever the following terms are used in the Plan, they shall have the
meaning specified below unless the context clearly indicated to the contrary.
"Affiliate" shall mean the Bank and any other "subsidiary" of the
Company as defined in Section 424(f) of the Code.
"Award" shall mean an award of Restricted Shares under the Plan.
"Bank" shall mean Mitchell Savings Bank, SSB, Spruce Pine, North
Carolina, or any successor thereto.
"Board" shall mean the Board of Directors of the Company.
"Change in Control" shall mean an event deemed to occur if and when (a)
an offeror other than the Company purchases shares of the common stock of the
Company or the Bank 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 Company or Bank representing twenty-five percent (25%) or
more of the combined voting power of the Company's or the Bank's then
outstanding securities, (c) the membership of the board of directors of the
Company or the Bank 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 Company or the Bank approve a merger, consolidation, sale
or disposition of all or substantially all of the Company's or the Bank'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.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean a committee of the Board consisting of at least
two nonemployee directors designated by the Board to administer the Plan. If
a separate committee is not designated by the Board, the Board shall serve as
the Committee for all purposes under the Plan.
"Company" shall mean Mitchell Bancorp, Inc., a North Carolina
corporation.
"Designated Beneficiary" shall have the meaning set forth in Section 2.2
hereof.
"Disability" shall have the meaning set forth in Section 22(e)(3) of the
Code. For purposes of the Plan, all determinations as to whether a
Participant has become disabled shall be made by a majority of the Committee,
upon the basis of such evidence as it deems necessary or desirable, and shall
be final and binding on all interested persons.
"Effective Date" shall have the meaning set forth in Section 5.1 hereof.
"Eligible Director" shall mean a member of the Board on the Effective
Date who is not also an Employee.
"Employee" shall mean any person who is employed by the Company or an
Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Participant" shall mean an Employee or Eligible Director to whom an
award of Restricted Shares is granted pursuant to the Plan.
"Plan" shall mean this Mitchell Bancorp, Inc. 1996 Management
Recognition and Development Plan, as hereinafter amended from time to time.
"Restricted Shares" shall mean Shares which are awarded to an Employee
or Eligible Director that are subject to the transfer and forfeitability
restrictions described in Section 4.2.
"Share" shall mean a share of the Company's common stock, par value $.01
per share.
2. Administration.
2.1 Administration
The Plan shall be administered by the Committee, which shall have the
power to interpret the Plan and to adopt such rules for the administration,
interpretation and application of the Plan and Awards thereunder as are
consistent with its terms and provisions and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made
by the Committee shall be binding upon all persons, including the Company,
shareholders, Participants and Designated Beneficiaries. The Secretary of the
Company shall be authorized to implement the Plan in accordance with its
terms, and to take such actions of a ministerial nature as shall be necessary
to effectuate the intent and purposes thereof. No member of the Committee
shall be personally liable for any action, determination or interpretation
made in good faith with respect to the Plan or the Awards thereunder, and all
members of the Committee shall be fully protected by the Company in respect to
any such action, determination or interpretation.
2.2 Designated Beneficiaries
If a Participant dies prior to receiving any payment due under the Plan,
such payment shall be made to his Designated Beneficiary. A Participant's
Designated Beneficiary shall be the beneficiary specifically designated by a
Participant in writing to receive amounts due the Participant in the event of
the Participant's death. In the absence of an effective designation by the
Participant, Designated Beneficiary shall mean the Participant's surviving
spouse or, if none, his estate.
3. Shares Subject To The Plan.
3.1 Shares Subject to the Plan
The maximum number of Shares that may be the subject of Awards under
this Plan shall be 39,196. The Company shall reserve such number of Shares
for the purposes of the Plan out of its authorized but unissued Shares or out
of Shares held in the Company's treasury, or partly out of each. In the event
that a trust is established in connection with the Plan pursuant to Section
5.4, the Company may authorize the trustees of the trust to purchase Shares in
the open market with funds contributed by the Company or an Affiliate and such
shares shall be included in the number of shares that may be the subject of
Awards. In the event
-2-
that Restricted Shares are forfeited for any reason, such Shares shall
thereafter again be available for award pursuant to the Plan.
3.2 Changes in the Company's Shares
In the event that the Committee shall determine that any
recapitalization, reorganization, merger, consolidation, stock split,
spin-off, combination, or exchange of Shares, or other similar corporate event
affects the Shares such that an adjustment is required in order to preserve
the benefits or potential benefits intended under this Plan, the Committee
shall, in such manner as it may deem equitable, adjust any or all of the
number and kind of Shares which thereafter may be awarded under the Plan, or
the number and kind of Shares subject to outstanding awards; provided,
however, that the number of Shares subject to any award shall always be a
whole number.
4. Restricted Shares
4.1 Eligibility; Awards Under the Plan
(a) Eligibility. Employees (including officers and employee directors
of the Bank) and Eligible Directors shall be eligible to participate in the
Plan upon designation by the Committee. To the extent that Shares are
available for grant under the Plan, then upon recommendation of the Board, the
Committee shall determine which of the Employees and Eligible Directors shall
be granted an Award and the number of Restricted Shares covered by each Award.
In selecting those Employees to whom Awards will be granted and the number of
Shares covered by such Awards, the Committee shall consider the position and
responsibilities of the eligible Employees, the length and value of their
services to the Company and its Affiliates, the compensation paid to the
Employees and any other factors the Committee may deem relevant, and the
Committee may request the written recommendation of the chief executive
officer and other senior executive officers of the Company and its Affiliates.
(b) Limitation on Awards. Notwithstanding anything herein to the
contrary, (i) no Employee shall receive Awards covering in excess of twenty
five percent (25%), (ii) no Eligible Director shall receive Awards covering in
excess of five percent (5%) and (iii) Eligible Directors shall not receive
Awards covering in excess of thirty percent (30%) in the aggregate, of the
number of shares reserved for issuance under the Plan.
(c) Fractions of Shares. Whenever under the terms of the Plan a
fractional share would be required to be issued, the fractional share shall be
rounded up to the next full share.
4.2 Terms of Awards
The Restricted Shares awarded hereunder shall be awarded only pursuant
to a written agreement, which shall be executed by the Participant and a duly
authorized officer of the Company and which shall contain the following terms
and conditions:
(a) Acceptance of Award. An award of Restricted Shares must be
accepted by the Participant within a period of sixty (60) days (or such other
period as the Committee may specify at grant) after the award date by the
execution of a Restricted Share award agreement in the form provided by the
Company.
(b) Restrictions and Conditions. The Restricted Shares awarded to a
Participant pursuant to this Section 4 shall be subject to the following
restrictions and conditions:
(i) A Participant shall not be permitted to vote, sell, transfer,
pledge, assign or otherwise encumber Restricted Shares awarded under the Plan
-3-
prior to the date on which such shares vest in accordance with clause (iii),
except in accordance with the laws of descent and distribution.
(ii) On the date an Award of Restricted Shares vests in accordance
with clause (iii), a Participant (or his beneficiary) shall be entitled to
receive any cash dividends previously paid with respect to the Restricted
Shares, together with interest accrued thereon (at a reasonable rate
established from time to time by the Committee). Prior to such date, cash
dividends shall be held by the Company for the account of the Participant.
Stock dividends, if any, issued with respect to Restricted Shares shall be
treated as additional Restricted Shares that are subject to the same
restrictions and other terms and conditions that apply with respect to the
Restricted Shares with respect to which such dividends are paid.
(iii)Subject to the applicable provisions of the Restricted Share
award agreement and this Section, a Participant's interest in Shares shall
immediately become fully vested and nonforfeitable, and the restrictions set
forth in this Section 4.2 shall lapse (x) ratably over a five (5) year period
whereby twenty percent (20%) of the Award shall vest on each of the first
through the fifth anniversaries of the date of grant so long as the
Participant remains an Employee or Eligible Director (y) upon the
Participant's death or Disability, or (z) upon a Change in Control.
4.3 Stock Certificates
Except as otherwise provided herein, a stock certificate registered in
the name of each Participant receiving a Restricted Share award (or in the
name of a trustee for the benefit of each Participant) shall be issued in
respect of such shares. Such certificate shall bear whatever appropriate
legend referring to the terms, conditions, and restrictions applicable to such
award as the Committee shall determine. The Committee may, in its sole
discretion, require that the stock certificates evidencing Restricted Shares
be held in custody by the Company (or in trust by a trustee) until the
restrictions thereon shall have lapsed. If a trust is established in
connection with the Plan, a certificate or certificates may be solely issued
in the name of the trust; provided, however, that the trustee shall maintain a
record of Awards authorized under the Plan and the amount of cash dividends
payable to a Participant upon the vesting of any Award or installment thereof.
5. Miscellaneous.
5.1 Shareholder Approval; Effective Date; Term
The Plan shall become effective on July 13, 1997 but only if, prior to
such date, the Plan is approved by a majority of the Company's shareholders at
an annual or special meeting of shareholders of the Company held not less than
six (6) months after the date of consummation of the Bank's mutual-to-stock
conversion. The Plan shall continue in effect until the tenth anniversary of
the Effective Date.
5.2 Amendment, Suspension or Termination of the Plan
The Plan may be wholly or partially amended or otherwise modified,
suspends or terminated at any time or from time to time by the Board;
provided, however, that no amendment or modification shall be made without
shareholder approval if such approval is necessary to comply with any tax or
regulatory requirement with which the Board deems it necessary or appropriate
to comply.
From and after the Effective Date, neither the amendment, suspension nor
termination of the Plan shall, without the consent of the Participant, alter
or impair any rights or obligations under any award theretofore granted. No
awards
-4-
may be granted during any period of suspension nor after termination or
expiration of the Plan.
5.3 Regulations and Other Approvals
(a) The obligation of the Company to deliver Shares with respect to
any award granted under the Plan shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state securities
laws, and the obtaining of all such approvals by governmental agencies as may
be deemed necessary or appropriate by the Board.
(b) The Board may make such changes to the Plan as may be necessary or
appropriate to comply with the rules or requirements of any governmental
authority.
(c) Each award of Shares is subject to the requirement that, if at any
time the Board determines, in its sole discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any United States, state or
federal law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, issuance of
Shares, no Shares shall be issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Board.
(d) In the event that the disposition of Shares acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act of 1933, and is not otherwise exempt from such registration,
such Shares shall be restricted against transfer to the extent required by the
Securities Act of 1933 or regulations thereunder, and the Board may require
any individual receiving Shares pursuant to the Plan, as a condition precedent
to receipt of such Shares, to represent to the Company in writing that the
Shares acquired by such individual are acquired for investment only and not
with a view to distribution. The certificate for any Shares acquired pursuant
to the Plan shall include any legend that the Board deems appropriate to
reflect any restrictions on transfer.
(e) At the time of grant of any award, the Board may provide in the
Restricted Share award agreement that any Shares received as a result of such
grant shall be subject to a right of first refusal in favor of the Company,
pursuant to which the Participant shall be required to offer to the Company
any Shares that he wishes to sell, with the price being the then fair market
value of such Shares, subject to such other terms and conditions as the Board
may specify in the award agreement.
(f) With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable terms
and conditions of Rule 16b-3 and any successor provisions. To the extent that
any provision 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.
(g) A Participant shall be required to pay to the Company or an
Affiliate the amount of any applicable withholding taxes in respect of an
Award and the Company shall be authorized to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes, including, but not limited to, the withholding of the
issuance of Shares to be issued upon the vesting of any Award, until the
Participant reimburses the Company for any amount required to be withheld.
-5-
5.4 Trust Arrangement
All benefits under the Plan represent an unsecured promise to pay by the
Company. The Plan shall be unfunded and the benefits hereunder shall be paid
only from the general assets of the Company resulting in the Participants
having no greater rights than the Company's general creditors; provided,
however, that nothing herein shall prevent or prohibit the Company from
establishing a trust or other arrangement for the purpose of providing for the
payment of the benefits payable under the Plan.
5.5 Governing Law
The Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of North
Carolina without giving effect to the choice of law principles thereof.
5.6 Titles; Construction
Titles are provided herein for convenience only and are not to serve as
a basis for interpretation or construction of the Plan. The masculine pronoun
shall include the feminine and neuter and the singular shall include the
plural, when the context so indicates.
-6-