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EXHIBIT 10.6
INCENTIVE STOCK OPTION AWARD
PURSUANT TO THE SUN BANCSHARES, INC.
2000 STOCK INCENTIVE PLAN
THIS AWARD is made as of the Grant Date by SUN BANCSHARES, INC. (the
"Company") to _________________________ (the "Optionee").
Upon and subject to the Terms and Conditions attached hereto and
incorporated herein by reference, the Company hereby awards as of the Grant
Date to Optionee an incentive stock option (the "Option"), as described below,
to purchase the Option Shares.
A. Grant Date: _________________________.
B. Type of Option: Incentive Stock Option.
C. Plan under which granted: Sun Bancshares, Inc. 2000 Stock Incentive
Plan.
D. Option Shares: All or any part of _____ shares of the Company's
$1.00 par value common stock (the "Common Stock"), subject to
adjustment as provided in the attached Terms and Conditions.
E. Exercise Price: $________ per share, subject to adjustment as
provided in the attached Terms and Conditions. The Exercise Price
is, in the judgment of the Committee, not less than 100% of the
Fair Market Value of a share of Common Stock on the Grant Date or,
in the case of an Over 10% Owner, not less than 110% of the Fair
Market Value of a share of Common Stock on the Grant Date.
F. Option Period: The Option may be exercised only during the Option
Period which commences on the Grant Date and ends, generally, on
the earlier of (a) the tenth (10th) anniversary of the Grant Date
(unless the Optionee is an Over 10% Owner, in which case the fifth
(5th) anniversary of the Grant Date); or (b) 90 days following the
date the Optionee ceases to be an employee of the Company
(including any Parent or Subsidiary); provided that the Option may
be exercised as to no more than the vested Option Shares,
determined pursuant to the Vesting Schedule. Note that other
limitations to exercising the Option, as described in the attached
Terms and Conditions, may apply.
G. Vesting Schedule: The Option Shares shall become vested in
accordance with Schedule 1 hereto.
IN WITNESS WHEREOF, the Company has executed and sealed this Award as
of the Grant Date set forth above.
SUN BANCSHARES, INC.
By:
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Title:
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TERMS AND CONDITIONS
TO THE
INCENTIVE STOCK OPTION AWARD
PURSUANT TO THE SUN BANCSHARES, INC.
2000 STOCK INCENTIVE PLAN
1. Exercise of Option. Subject to the provisions provided herein
or in the Award made pursuant to the Sun Bancshares, Inc. 2000 Stock Incentive
Plan:
(a) the Option may be exercised with respect to all or any
portion of the vested Option Shares at any time during the Option
Period by the delivery to the Company, at its principal place of
business, of a written notice of exercise in substantially the form
attached hereto as Exhibit 1, which shall be actually delivered to the
Company no earlier than thirty (30) days and no later than ten (10)
days prior to the date upon which Optionee desires to exercise all or
any portion of the Option; and
(b) payment to the Company of the Exercise Price multiplied
by the number of Option Shares being purchased (the "Purchase Price")
as provided in Section 2.
(c) Notwithstanding any other provision of this Agreement,
in the event that the capital of the Bank falls below the minimum
requirements determined by the primary Federal regulator of the Bank
(the "Regulator"), the Regulator may direct the Company to require the
Optionee to exercise, or otherwise forfeit, the Option in whole or in
part. If the Regulator gives such direction, the Company will notify
the Optionee within forty-five (45) days from the date the Regulator
notifies the Company or the Bank in writing that the Optionee must
exercise, or otherwise forfeit, the Option in whole or in part. If the
Optionee does not exercise the Option in accordance with the Company's
direction within twenty-one (21) days of the Company's notification to
the Optionee, the Committee may provide for the cancellation of the
Option.
Upon acceptance of such notice and receipt of payment in full of the Purchase
Price, the Company shall cause to be issued a certificate representing the
Option Shares purchased.
2. Purchase Price. Payment of the Purchase Price for all Option
Shares purchased pursuant to the exercise of an Option shall be made in cash,
certified check or if and when the Common Stock becomes traded by brokers,
whether on a national securities exchange or otherwise, by receipt of the
Purchase Price in cash from a broker, dealer or other "creditor" as defined by
Regulation T issued by the Board of Governors of the Federal Reserve System
following delivery by the Optionee to the
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Committee of instructions in a form acceptable to the Committee
regarding delivery to such broker, dealer or other creditor of that
number of Option Shares with respect to which the Option is exercised.
3. Rights as Shareholder. Until the stock certificates reflecting
the Option Shares accruing to the Optionee upon exercise of the Option are
issued to the Optionee, the Optionee shall have no rights as a shareholder with
respect to such Option Shares. The Company shall make no adjustment for any
dividends or distributions or other rights on or with respect to Option Shares
for which the record date is prior to the issuance of that stock certificate,
except as the Plan or the attached Award otherwise provides.
4. Restriction on Transfer of Option and of Option Shares. The
Option evidenced hereby is nontransferable other than by will or the laws of
descent and distribution and shall be exercisable during the lifetime of the
Optionee only by the Optionee (or in the event of his Disability, by his
personal representative) and after his death, only by his legatee or the
executor of his estate.
5. Changes in Capitalization.
(a) If the number of shares of Common Stock shall be
increased or decreased by reason of a subdivision or combination of
shares of Common Stock, the payment of a stock dividend in shares of
Common Stock or any other increase or decrease in the number of shares
of Common Stock outstanding effected without receipt of consideration
by the Company, an appropriate adjustment shall be made by the
Committee, in a manner determined in its sole discretion, in the
number and kind of Option Shares and in the Exercise Price.
(b) If the Company shall be the surviving corporation in any
merger consolidation, extraordinary dividend (including spin-off)
recapitalization, reclassification of shares or similar
reorganization, the Optionee shall be entitled to purchase the number
and class of securities to which a holder of the number of shares of
Common Stock subject to the Option at the time of the transaction
would have been entitled to receive as a result of such transaction,
and a corresponding adjustment, where appropriate, shall be made in
the Exercise Price. In the event of a Change in Control or other
corporate transaction pursuant to which the Company is not the
surviving entity, the Committee may provide for the assumption of the
Option by the surviving entity or the substitution of a new option,
adjusted in a manner similar to that contemplated by the immediately
preceding sentence; however, if the surviving entity does not agree to
the assumption or substitution of the Option, the Committee may elect
to terminate the Option Period as of the effective date of the Change
in Control in consideration of the payment to the Optionee of the sum
of the difference between the then aggregate Fair Market Value of the
Common Stock and the aggregate Exercise Price for each Option Share
which has not been exercised as of the effective date of the Change in
Control. A dissolution or liquidation of the Company shall cause the
Option to terminate as to any portion thereof not exercised as of the
effective date of the dissolution or liquidation.
(c) The existence of the Plan and the Option granted
pursuant to this Agreement shall not affect in any way the right or
power of the Company to make or authorize any adjustment,
reclassification, reorganization or other change in its capital or
business structure, any merger or consolidation of the Company, any
issue of debt or equity securities having
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preferences or priorities as to the Common Stock or the rights
thereof, the dissolution or liquidation of the Company, any sale or
transfer of all or any part of its business or assets, or any other
corporate act or proceeding. Any adjustment pursuant to this Section
may provide, in the Committee's discretion, for the elimination
without payment therefor of any fractional shares that might otherwise
become subject to any Option.
6. Special Limitation on Exercise. No purported exercise of the
Option shall be effective without the approval of the Committee, which may be
withheld to the extent that the exercise, either individually or in the
aggregate together with the exercise of other previously exercised stock
options and/or offers and sales pursuant to any prior or contemplated offering
of securities, would, in the sole and absolute judgment of the Committee,
require the filing of a registration statement with the United States
Securities and Exchange Commission or with the securities commission of any
state. If a registration statement is not in effect under the Securities Act of
1933 or any applicable state securities law with respect to shares of Common
Stock purchasable or otherwise deliverable under the Option, the Optionee (a)
shall deliver to the Company, prior to the exercise of the Option or as a
condition to the delivery of Common Stock pursuant to the exercise of an Option
exercise, such information, representations and warranties as the Company may
reasonably request in order for the Company to be able to satisfy itself that
the Option Shares are being acquired in accordance with the terms of an
applicable exemption from the securities registration requirements of
applicable federal and state securities laws and (b) shall agree that the
shares of Common Stock so acquired will not be disposed of except pursuant to
an effective registration statement, unless the Company shall have received an
opinion of counsel that such disposition is exempt from such requirement under
the Securities Act of 1933 and any applicable state securities law.
7. Legend on Stock Certificates. Certificates evidencing the
Option Shares, to the extent appropriate at the time, shall have noted
conspicuously on the certificates a legend intended to give all persons full
notice of the existence of the conditions, restrictions, rights and obligations
set forth herein and in the Plan.
8. Governing Laws. This Award and the Terms and Conditions shall
be construed, administered and enforced according to the laws of the State of
South Carolina.
9. Successors. This Award and the Terms and Conditions shall be
binding upon and inure to the benefit of the heirs, legal representatives,
successors and permitted assigns of the Optionee and the Company.
10. Notice. Except as otherwise specified herein, all notices and
other communications under this Award shall be in writing and shall be deemed
to have been given if personally delivered or if sent by registered or
certified United States mail, return receipt requested, postage prepaid,
addressed to the proposed recipient at the last known address of the recipient.
Any party may designate any other address to which notices shall be sent by
giving notice of the address to the other parties in the same manner as
provided herein.
11. Severability. In the event that any one or more of the
provisions or portion thereof contained in the Award and these Terms and
Conditions shall for any reason be held to be invalid, illegal or unenforceable
in any respect, the same shall not invalidate or otherwise affect any other
provisions of the Award and these Terms and
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Conditions, and the Award and these Terms and Conditions shall be construed as
if the invalid, illegal or unenforceable provision or portion thereof had never
been contained herein.
12. Entire Agreement. Subject to the terms and conditions of the
Plan, the Award and the Terms and Conditions express the entire understanding
of the parties with respect to the Option.
13. Violation. Any transfer, pledge, sale, assignment, or
hypothecation of the Option or any portion thereof shall be a violation of the
terms of the Award or these Terms and Conditions and shall be void and without
effect.
14. Headings and Capitalized Terms. Section headings used herein
are for convenience of reference only and shall not be considered in construing
the Award or these Terms and Conditions. Capitalized terms used, but not
defined, in either the Award or the Terms and Conditions shall be given the
meaning ascribed to them in the Plan.
15. Specific Performance. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of the
Award and these Terms and Conditions, the party or parties who are thereby
aggrieved shall have the right to specific performance and injunction in
addition to any and all other rights and remedies at law or in equity, and all
such rights and remedies shall be cumulative.
16. No Right to Continued Retention. Neither the establishment of
the Plan nor the award of Option Shares hereunder shall be construed as giving
the Optionee the right to continued employment with the Company or any
affiliate.
17. Qualified Status of Option. In accordance with Section 2.4 of
the Plan, the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of the Option Shares which become
exercisable for the first time by an individual during any calendar year shall
not exceed $100,000. If the foregoing limitation is exceeded with respect to
any portion of the Option Shares, that portion of the Option Shares which cause
the limitation to be exceeded shall be treated as a Non-Qualified Stock Option.
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EXHIBIT 1
NOTICE OF EXERCISE OF
STOCK OPTION TO PURCHASE
COMMON STOCK OF
SUN BANCSHARES, INC.
Name
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Address
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Date
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Sun Bancshares, Inc.
U.S. Highway 17
Murrells Inlet, SC 29576
Attn: Corporate Secretary
Re: Exercise of Incentive Stock Option
Gentlemen:
Subject to acceptance hereof by Sun Bancshares, Inc. (the "Company")
and pursuant to the provisions of the Sun Bancshares, Inc. 2000 Stock Incentive
Plan (the "Plan"), I hereby give notice of my election to exercise options
granted to me to purchase ______________ shares of Common Stock of the Company
under the Incentive Stock Option Award (the "Award") dated as of ____________.
The purchase shall take place as of __________, 200__ (the "Exercise Date").
On or before the Exercise Date, I will pay the applicable purchase
price as follows:
[ ] by delivery of cash or a certified check for $___________ for
the full purchase price payable to the order of Sun Bancshares,
Inc.
Exhibit 1 - Page 1 of 4
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[ ] by delivery of the purchase price by _________________________,
a broker, dealer or other "creditor" as defined by Regulation T
issued by the Board of Governors of the Federal Reserve System.
I hereby authorize the Company to issue a stock certificate for
the number of shares indicated above in the name of said broker,
dealer or other creditor or its nominee pursuant to instructions
received by the Company and to deliver said stock certificate
directly to that broker, dealer or other creditor (or to such
other party specified in the instructions received by the
Company from the broker, dealer or other creditor) upon receipt
of the purchase price.
As soon as the stock certificate is registered in my name, please
deliver it to me at the above address.
If the Common Stock being acquired is not registered for issuance to
and resale by the Optionee pursuant to an effective registration statement on
Form S-8 (or successor form) filed under the Securities Act of 1933, as amended
(the "1933 Act"), I hereby represent, warrant, covenant, and agree with the
Company as follows:
The shares of the Common Stock being acquired by me will be acquired
for my own account without the participation of any other person, with
the intent of holding the Common Stock for investment and without the
intent of participating, directly or indirectly, in a distribution of
the Common Stock and not with a view to, or for resale in connection
with, any distribution of the Common Stock, nor am I aware of the
existence of any distribution of the Common Stock;
I am not acquiring the Common Stock based upon any representation,
oral or written, by any person with respect to the future value of, or
income from, the Common Stock but rather upon an independent
examination and judgment as to the prospects of the Company;
The Common Stock was not offered to me by means of publicly
disseminated advertisements or sales literature, nor am I aware of any
offers made to other persons by such means;
I am able to bear the economic risks of the investment in the Common
Stock, including the risk of a complete loss of my investment therein;
I understand and agree that the Common Stock will be issued and sold
to me without registration under any state law relating to the
registration of securities for sale, and will
Exhibit 1 - Page 2 of 4
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be issued and sold in reliance on the exemptions from registration
under the 1933 Act, provided by Sections 3(b) and/or 4(2) thereof and
the rules and regulations promulgated thereunder;
The Common Stock cannot be offered for sale, sold or transferred by me
other than pursuant to: (A) an effective registration under the 1933
Act or in a transaction otherwise in compliance with the 1933 Act; and
(B) evidence satisfactory to the Company of compliance with the
applicable securities laws of other jurisdictions. The Company shall
be entitled to rely upon an opinion of counsel satisfactory to it with
respect to compliance with the above laws;
The Company will be under no obligation to register the Common Stock
or to comply with any exemption available for sale of the Common Stock
without registration or filing, and the information or conditions
necessary to permit routine sales of securities of the Company under
Rule 144 under the 1933 Act are not now available and no assurance has
been given that it or they will become available. The Company is under
no obligation to act in any manner so as to make Rule 144 available
with respect to the Common Stock;
I have and have had complete access to and the opportunity to review
and make copies of all material documents related to the business of
the Company, including, but not limited to, contracts, financial
statements, tax returns, leases, deeds and other books and records. I
have examined such of these documents as I wished and am familiar with
the business and affairs of the Company. I realize that the purchase
of the Common Stock is a speculative investment and that any possible
profit therefrom is uncertain;
I have had the opportunity to ask questions of and receive answers
from the Company and any person acting on its behalf and to obtain all
material information reasonably available with respect to the Company
and its affairs. I have received all information and data with respect
to the Company which I have requested and which I have deemed relevant
in connection with the evaluation of the merits and risks of my
investment in the Company;
I have such knowledge and experience in financial and business matters
that I am capable of evaluating the merits and risks of the purchase
of the Common Stock hereunder and I am able to bear the economic risk
of such purchase; and
The agreements, representations, warranties and covenants made by me
herein extend to and apply to all of the Common Stock of the Company
issued to me pursuant to this Award. Acceptance by me of the
certificate representing such Common Stock shall constitute a
confirmation by me that all such agreements, representations,
warranties and covenants made herein shall be true and correct at that
time.
I understand that the certificates representing the shares being
purchased by me in accordance with this notice shall bear a legend
referring to the foregoing covenants, representations and warranties
and restrictions on transfer, and I agree that a legend to that effect
may be placed
Exhibit 1 - Page 3 of 4
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on any certificate which may be issued to me as a substitute for the
certificates being acquired by me in accordance with this notice. I
further understand that capitalized terms used in this Notice of
Exercise without definition shall have the meanings given to them in
the Plan.
Very truly yours,
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AGREED TO AND ACCEPTED:
SUN BANCSHARES, INC.
By:
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Title:
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Number of Shares
Exercised:
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Number of Shares
Remaining: Date:
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Exhibit 1 - Page 4 of 4
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SCHEDULE 1
VESTING SCHEDULE
INCENTIVE STOCK OPTION AWARD
ISSUED PURSUANT TO THE
SUN BANCSHARES, INC.
2000 STOCK INCENTIVE PLAN
A. The Option Shares shall become vested Option Shares following
completion of the years of service as an employee of the Company or
any Parent or Subsidiary as indicated in the schedule below.
Percentage of Option Shares Years of Service
Which are Vested Shares after the Grant Date
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20% 1
40% 2
60% 3
80% 4
100% 5
B. Notwithstanding Part A, in the event of a Change in Control prior to
the third anniversary of the Grant Date, the Option shall become
vested as indicated in the following Vesting Schedule:
Percentage of Option Shares Years of Service
Which are Vested Shares after the Grant Date
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33 1/3% 1
66 2/3% 2
100% 3
C. Notwithstanding Part A, in the event of a Change in Control subsequent
to the third anniversary of the Grant Date, the Option will be fully
vested as of a date determined by the Committee which is no less than
thirty (30) days prior to the effective date of the Change in Control.
D. For purposes of the Vesting Schedule, Optionee shall be granted a year
of service for each twelve-consecutive-month period following the
Grant Date and during which Optionee continues, at all times, as an
employee of the Company or any Parent or Subsidiary.
Schedule 1 - Page 1 of 1