Exhibit 10.2 Bank of Granite Corporation/First Commerce Corporation Omnibus
Stock Incentive Plan
BANK OF GRANITE/FIRST COMMERCE CORPORATION
OMNIBUS STOCK AND INCENTIVE PLAN
Approved by First Commerce Corporation Shareholders on April 23, 2002
Assumed by Bank of Granite Corporation pursuant to that certain Merger Agreement
between Bank of Granite Corporation and First Commerce Corporation dated as of
December 18, 2002, as amended, and subject to the terms and conditions thereof
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TABLE OF CONTENTS
OMNIBUS STOCK AND INCENTIVE PLAN......................................... 53
1. Purpose............................................................. 53
2. Definitions......................................................... 53
3. Administration...................................................... 56
4. Term of Plan/Common Stock Subject to Plan........................... 57
5. Eligibility......................................................... 57
6. Stock Options....................................................... 58
7. Restricted Awards................................................... 59
8. Performance Units................................................... 61
9. Stock Purchase Rights............................................... 62
10. Deferral Elections.................................................. 66
11. Termination of Employment........................................... 66
12. Non-transferability of Awards....................................... 69
13. Changes in Capitalization and Other Matters......................... 70
14. Change in Control................................................... 70
15. Amendment, Suspension and Termination............................... 74
16. Miscellaneous....................................................... 74
PERFORMANCE UNIT AGREEMENT............................................... 80
RESTRICTED STOCK AGREEMENT............................................... 83
NON-QUALIFIED STOCK OPTION AGREEMENT FOR KEY EMPLOYEES.................. 86
INCENTIVE STOCK OPTION AGREEMENT......................................... 90
STOCK PURCHASE SUBSCRIPTION AGREEMENT.................................... 94
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BANK OF GRANITE/FIRST COMMERCE CORPORATION
OMNIBUS STOCK AND INCENTIVE PLAN
1. PURPOSE. The purpose of this Plan is to further and promote
the interests of Bank of Granite Corporation (the "Company") and its
shareholders by enabling the Company and its Subsidiaries to attract, retain and
motivate key employees and directors, and to align the interests of such key
employees and directors with those of the Company's shareholders. Additionally,
this Plan's objectives are to provide a competitive reward for achieving
longer-term goals, provide balance to short-term incentive awards, and reinforce
a one company perspective. To do so, this Plan offers performance-based stock
and cash incentives and other equity-based incentive awards and opportunities to
provide such key employees and directors with a proprietary interest in
maximizing the growth, profitability and overall success of the Company.
2. DEFINITIONS. For purposes of this Plan, the following terms
shall have the meanings set forth below:
2.1 "AWARD" means an award, grant or issuance made to a
Participant under Sections 6, 7, 8 and/or 9.
2.2 "AWARD AGREEMENT" means the agreement executed by a
Participant pursuant to Sections 3.2 and 15.7 in connection with the granting of
an Award.
2.3 "BOARD" means the Board of Directors of the Company,
as constituted from time to time.
2.4 "CODE" means the Internal Revenue Code of 1986, as in
effect and as amended from time to time, or any successor statute thereto,
together with any rules, regulations and interpretations promulgated thereunder
or with respect thereto.
2.5 "COMMITTEE" means the Compensation Committee of the
Board, as constituted in accordance with Section 3.
2.6 "COMMON STOCK" means the Common Stock of the Company.
2.7 "COMPANY" means Bank of Granite Corporation, a
Delaware corporation, or any successor corporation to Bank of Granite
Corporation.
2.8 "COMPENSATION" shall mean all cash compensation
received by an Employee from the Company or a Designated Subsidiary and
includable in the Employee's gross income for federal income tax purposes, other
than any taxable reimbursements. By way of illustration, but not limitation,
"Compensation" shall include regular compensation such as salary, wages,
overtime, shift differentials, bonuses, commissions, and incentive compensation,
but shall exclude relocation reimbursements, expense reimbursements, tuition or
other reimbursements, and income realized as a result of participation in any
stock option, stock purchase, or similar plan of the Company or any Designated
Subsidiary.
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2.9 "DISABILITY" means disability as determined by the
Committee in accordance with standards and procedures similar to those under the
Company's long-term disability plan, if any. If the Company does not then
maintain a long-term disability plan, Disability shall mean the inability of a
Participant, as determined by the Committee, substantially to perform such
Participant's regular duties and responsibilities due to a medically
determinable physical or mental illness which has lasted (or can reasonably be
expected to last) for a period of six (6) consecutive months.
2.10 "EMPLOYEE" shall mean any individual who is an
employee of the Company for tax purposes. For purposes of this Plan, the
employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the Company.
2.11 "EXCHANGE ACT" means the Securities Exchange Act of
1934, as in effect and as amended from time to time, or any successor statute
thereto, together with any rules, regulations and interpretations promulgated
thereunder or with respect thereto.
2.12 "FAIR MARKET VALUE" shall mean, as of any date, the
value of Common Stock determined as follows:
(a) If the Common Stock is listed on an established stock
exchange or national market system, including, without limitation, the
Nasdaq National Market or the Nasdaq SmallCap Market or the
over-the-counter Bulletin Board of The Nasdaq Stock Market, Inc. (the
"Nasdaq"), its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system for the last market trading day on the date of
such determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable, or;
(b) If the Common Stock is regularly quoted by a
recognized securities dealer, but selling prices are not reported, its
Fair Market Value shall be the mean of the closing bid and asked prices
for the Common Stock on the date of such determination, as reported in
The Wall Street Journal or such other source as the Board deems
reliable, or;
(c) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.
2.13 "INCENTIVE STOCK OPTION" means any stock option
granted pursuant to the provisions of Section 6 that is intended to be (and is
specifically designated as) an "incentive stock option" within the meaning of
Section 422 of the Code.
2.14 "NON-EMPLOYEE DIRECTOR" means a member of the Board
or of the Board of Directors of a Subsidiary who is not an employee of the
Company or any Subsidiary.
2.15 "NON-QUALIFIED STOCK OPTION" means any stock option
awarded pursuant to the provisions of Section 6 of this Plan that is not an
Incentive Stock Option.
2.16 "OFFERING COMMENCEMENT DATE" shall mean the first day
of each Offering Period.
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2.17 "OFFERING PERIOD" shall mean a period of
approximately twelve months during which funds may be accumulated for the
exercise of a Stock Purchase Right, commencing and ending as follows: commencing
on the first Trading Day on or after December 15th, and terminating on the last
Trading Day in the period ending December 14th. The duration of Offering Periods
may be changed pursuant to Section 9.
2.18 "PARTICIPANT" means an Employee or Non-Employee
Director who is selected by the Committee under Section 5 to receive an Award,
or an Employee who receives a Stock Purchase Right under Section 9.
2.19 "PERFORMANCE UNITS" means the monetary units granted
under Section 8.
2.20 "PLAN" means the Bank of Granite/First Commerce
Corporation Omnibus Stock and Incentive Plan as in effect and as amended from
time to time (together with any rules and regulations promulgated by the
Committee with respect thereto).
2.21 "PURCHASE DATE" shall mean the last day of each
Offering Period.
2.22 "PURCHASE PRICE" shall mean an amount equal to 85% of
the Fair Market Value of a share of Common Stock on the Offering Commencement
Date or on the Purchase Date, whichever is lower; provided, however, that the
Purchase Price may be adjusted by the Board pursuant to Section 9.12.3 of this
Plan.
2.23 "RESERVES" shall mean the number of shares of Common
Stock covered by Awards under this Plan that have not yet been exercised and the
number of shares of Common Stock that have been authorized for issuance under
this Plan, but not yet awarded.
2.24 "RESTRICTED AWARD" means an Award of Restricted Stock
pursuant to the provisions of Section 7.
2.25 "RESTRICTED STOCK" means the restricted shares of
Common Stock granted pursuant to the provisions of Section 7 with the
restriction that the holder may not sell, transfer, pledge, or assign such
Restricted Stock and such other restrictions (which other restrictions may
expire separately or in combination, at one time, from time to time or in
installments), as determined by the Committee in accordance with and as set
forth in this Plan and/or the relevant Award Agreement.
2.26 "RETIREMENT" means (i) as to officers and employees,
retirement from active employment with the Company and its Subsidiaries and
receiving benefits under the Company's qualified retirement plan and (ii) as to
Non-Employee Directors, the same as "Retirement" under the "Retirement Policy"
in effect for the Board of Directors on which the Participant was serving upon
receipt of an Award.
2.27 "STOCK OPTIONS" means Incentive Stock Options and
Non-Qualified Stock Options.
2.28 "STOCK PURCHASE RIGHT" means a purchase right granted
under Section 9.
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2.29 "SUBSIDIARY(IES)" means any corporation (other than
the Company) in an unbroken chain of corporations, beginning with the Company,
if each of such corporations, other than the last corporation in the unbroken
chain, owns fifty percent (50%) or more of the voting stock in one of the other
corporations in such chain.
2.30 "TRADING DAY" shall mean a day on which national
stock exchanges and the Nasdaq are open for trading.
3. ADMINISTRATION.
3.1 THE COMMITTEE. This Plan shall be administered by the
Committee. The Committee shall be appointed from time to time by the Board and
shall be comprised of not less than three (3) of the then members of the Board.
Members of the Committee shall serve at the pleasure of the Board, and the Board
may at any time and from time to time remove members from the Committee, or,
subject to the immediately preceding sentence, add members to the Committee. A
majority of the members of the Committee shall constitute a quorum for the
transaction of business. Any act or acts approved in writing by all of the
members of the Committee then serving shall be the act or acts of the Committee
(as if taken by unanimous vote at a meeting of the Committee duly called and
held).
3.2 PLAN ADMINISTRATION AND PLAN RULES. The Committee is
authorized to construe and interpret this Plan and to promulgate, amend and
rescind rules, policies and regulations relating to the implementation,
administration and maintenance of this Plan. Subject to the terms and conditions
of this Plan, the Committee shall make all determinations necessary or advisable
for the implementation, administration and maintenance of this Plan including,
without limitation, (a) selecting Participants, (b) making Awards in such
amounts and form as the Committee shall determine, (c) imposing such
restrictions, terms and conditions upon such Awards as the Committee shall deem
appropriate, and (d) correcting any defect or omission, or reconciling any
inconsistency, in this Plan and/or any Award Agreement. The Committee may
designate persons other than members of the Committee to carry out the
day-to-day administration of this Plan under such conditions and limitations as
it may prescribe, except that the Committee shall not delegate its authority
with regard to selection for participation in this Plan and/or the granting of
any Awards to Participants. The Committee's determinations under this Plan need
not be uniform and may be made selectively among Participants, whether or not
such Participants are similarly situated. Any determination, decision or action
of the Committee in connection with the construction, interpretation,
administration, implementation or maintenance of this Plan shall be final,
conclusive and binding upon all Participants and any person(s) claiming under or
through any Participant(s). The Company shall effect the granting of Awards
under this Plan, in accordance with the determinations made by the Committee, by
execution of written agreements and/or other instruments in such form as is
approved by the Committee.
3.3 LIABILITY LIMITATION. Neither the Board nor the
Committee, nor any member of either, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with this Plan (or any Award Agreement), and the members of the Board and the
Committee shall be entitled to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense (including,
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without limitation, attorneys' fees) arising or resulting therefrom to the
fullest extent permitted by the Articles of Incorporation and/or Bylaws of the
Company as then in effect and to the fullest extent under any directors' and
officers' liability insurance coverage which may be in effect from time to time.
4. TERM OF PLAN/COMMON STOCK SUBJECT TO PLAN.
4.1 TERM. This Plan shall terminate on December 31, 2012,
except with respect to Awards then outstanding. After such date no further
Awards shall be granted under this Plan.
4.2 COMMON STOCK SUBJECT TO PLAN.
4.2.1 COMMON STOCK. The Board shall reserve for
Awards under this Plan 160,000 shares of the authorized and unissued shares of
Common Stock. In the event of a change in the Common Stock of the Company that
is limited to a change in the designation thereof to "Capital Stock" or other
similar designation, or to a change in the par value thereof, or from par value
to no par value, without increase or decrease in the number of issued shares,
the shares resulting from any such change shall be deemed to be the Common Stock
for purposes of this Plan. Common Stock which may be issued under this Plan
shall be authorized and unissued shares. No fractional shares of Common Stock
shall be issued under this Plan.
4.2.2 COMMON STOCK AUTHORIZED. The maximum number
of shares of Common Stock authorized for issuance under this Plan shall be
160,000.
4.3 COMPUTATION OF AVAILABLE SHARES. For the purpose of
computing the total number of shares of Common Stock available for Awards, there
shall be counted against the limitations set forth in Section 4.2 the maximum
number of shares of Common Stock potentially subject to issuance upon exercise
or settlement of Awards granted under Section 6, the number of shares of Common
Stock issued or subject to potential issuance under Awards of Restricted Stock
pursuant to Section 7, the maximum number of shares of Common Stock potentially
issuable under Awards of Performance Units pursuant to Section 8, and the
maximum number of shares issued or subject to issuance under Awards granted
under Section 9, in each case determined as of the date on which such Awards are
granted. If any Awards expire unexercised or are forfeited, surrendered,
canceled, terminated or settled in cash in lieu of Common Stock, the shares of
Common Stock which were theretofore subject (or potentially subject) to such
Awards shall again be available for Awards under this Plan to the extent of such
expiration, forfeiture, surrender, cancellation, termination or settlement of
such Awards; provided, however, that forfeited Awards shall not again be
available for Awards under this Plan if the Participant received, directly or
indirectly, any of the benefits of ownership of the securities of the Company
underlying such Award, including, without limitation, the benefit described in
Section 7.6.
5. ELIGIBILITY. Employees eligible for Awards under this Plan
shall consist of key Employees of the Company and/or its Subsidiaries who are
responsible for the management, growth and protection of the business of the
Company and/or its Subsidiaries and whose performance or contribution, in the
sole discretion of the Committee, benefits or will benefit the Company in a
significant manner. Non-employees (e.g., those with third party relationships
such
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as directors or advisory directors of the Company and/or a Subsidiary) shall be
eligible Participants for Awards of Non-Qualified Stock Options and/or
Restricted Stock at the sole discretion of the Committee. Notwithstanding the
foregoing, the following Employees shall not be eligible for an Award of Stock
Purchase Rights:
(a) any Employee whose customary employment is less than
20 hours per week; and
(b) any Employee whose customary employment is not more
than five (5) months in any calendar year.
Any provisions of this Plan to the contrary notwithstanding, no
Employee shall be awarded a Stock Purchase Right under this Plan (i) to the
extent that, immediately after the Award, such Employee (including by
attribution under Section 424(d) of the Code) would own capital stock of the
Company and/or hold outstanding options to purchase stock of the Company
constituting in the aggregate five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company, or
(ii) to the extent that his or her stock options and Stock Purchase Rights under
this Plan and any other employee stock purchase plans of the Company and its
Subsidiaries exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock
(determined at the Fair Market Value of the shares at the time such Stock
Purchase Right is granted) in the aggregate for each calendar year in which such
Stock Purchase Right is outstanding at any time.
6. STOCK OPTIONS.
6.1 TERMS AND CONDITIONS. Stock Options awarded under
this Plan may be in the form of Incentive Stock Options or Non-Qualified Stock
Options. Such Stock Options shall be subject to the terms and conditions set
forth in this Section 6 and any additional terms and conditions, not
inconsistent with the express terms and provisions of this Plan, as the
Committee shall set forth in the relevant Award Agreement.
6.2 GRANTS. Stock Options may be granted under this Plan
in such form as the Committee may from time to time approve. Subject to Section
5, Stock Options may be granted alone or in addition to other Awards.
Notwithstanding the above, no Incentive Stock Options shall be granted to any
Participant who owns more than 10% of the combined total voting power of the
Company or any Subsidiary, unless the requirements of Section 422(c)(6) of the
Code are satisfied.
6.3 EXERCISE PRICE. The exercise price per share of
Common Stock subject to a Stock Option shall be determined by the Committee at
the time of Award; provided, however, that the exercise price of an Incentive
Stock Option shall not be less than one hundred percent (100%) of the Fair
Market Value of the Common Stock on the date of the Award of such Incentive
Stock Option. For any Participant who owns ten percent (10%) or more of the
combined total voting power of the Company or any Subsidiary, the exercise price
of an Incentive Stock Option shall not be less than one hundred ten percent
(110%) of such Fair Market Value.
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6.4 TERM. The term of each Stock Option shall be such
period of time as is fixed by the Committee at the time of grant; provided,
however, that the term of any Incentive Stock Option shall not exceed ten (10)
years after the date the Incentive Stock Option is awarded. For any Participant
who owns ten percent (10%) or more of the combined total voting power of the
Company or any Subsidiary, the term of each Incentive Stock Option shall not
exceed five (5) years.
6.5 METHOD OF EXERCISE. A Stock Option may be exercised,
in whole or in part, by giving written notice of exercise to the Director of
Personnel of the Company, or such other officer of the Company as the Committee
shall designate, specifying the number of shares to be purchased. Such notice
shall be accompanied by payment in full of the exercise price in cash, by
certified check, bank draft or money order payable to the order of the Company
or, if permitted by the terms of the relevant Award Agreement and applicable
law, by delivery of, alone or in conjunction with a partial cash or instrument
payment, (a) a fully-secured, recourse promissory note, or (b) shares of Common
Stock already owned by the Participant or to be received upon exercise of the
Stock Option in a "cashless exercise" as described below. The Committee may, in
the relevant Award Agreement, also permit Participants (either on a selective or
group basis) to simultaneously exercise Stock Options and sell the shares of
Common Stock thereby acquired, and use the proceeds from such sale as payment of
the exercise price of such Stock Options. Payment instruments shall be received
by the Company subject to collection. The proceeds received by the Company upon
exercise of any Stock Option may be used by the Company for general corporate
purposes.
6.6 DATE OF EXERCISE. Vesting dates of Stock Options
awarded to a Participant will be specified in the applicable Award Agreement at
the discretion of the Committee. Stock Options that meet the vesting
requirements may be exercised in whole or in part at any time and from time to
time during their specified terms.
7. RESTRICTED AWARDS.
7.1 TERMS AND CONDITIONS. Restricted Awards shall be in
the form of grants of Restricted Stock. Restricted Awards shall be subject to
the terms and conditions set forth in this Section 7 and any additional terms
and conditions, not inconsistent with the express terms and provisions of this
Plan, as the Committee shall set forth in the relevant Award Agreement.
7.2 RESTRICTED STOCK GRANTS. An Award of Restricted Stock
is an Award of shares of Common Stock, in uncertificated form, issued to and
registered with the Company's designated Stock Transfer Agent, in the name of
the applicable Participant, subject to such restrictions, terms and conditions
as the Committee deems appropriate, including, without limitation, restrictions
on the sale, assignment, transfer, pledge, hypothecation or other disposition of
such shares and the requirements that the Participant deposit such shares with
the Company while such shares are subject to such restrictions and that such
shares be forfeited upon termination of employment or cessation of service as a
Non-Employee Director for specified reasons within a specified period of time.
7.3 GRANTS OF AWARDS.
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7.3.1 Subject to Section 5, Restricted Awards may
be granted alone or in addition to any other Awards. Subject to the terms of
this Plan, the Committee shall determine the number of Restricted Awards to be
granted to a Participant and the Committee may impose different terms and
conditions on any particular Restricted Award made to any Participant.
7.3.2 Each Restricted Award of Restricted Stock
shall be issued in an uncertificated form and registered in the name of the
Participant. The stock transfer books of the Company's designated Stock Transfer
Agent shall be noted with the following legend with reference to the shares made
subject to such Restricted Award.
"These shares are subject to the terms and restrictions of the
Bank of Granite/First Commerce Corporation Omnibus Stock And
Incentive Plan; such shares are subject to forfeiture or
cancellation under the terms of said Plan; and such shares
shall not be sold, transferred, assigned, pledged, encumbered,
or otherwise alienated or hypothecated except pursuant to the
provisions of said Plan, a copy of which Plan is available
from Bank of Granite Corporation upon request."
Such Award shall be held in uncertificated form until the restrictions
thereon shall have lapsed and all of the terms and conditions applicable thereto
have been satisfied.
7.4 RESTRICTION PERIOD. In accordance with Sections 7.1
and/or 7.2, Restricted Awards shall only become unrestricted and vest in the
Participant in accordance with such vesting schedule relating to the service
performance restriction applicable to such Restricted Award as the Committee may
establish in the relevant Award Agreement (the "Restriction Period").
Notwithstanding the immediately preceding sentence, in no event shall the
Restriction Period be less than one (1) year and one day after the date on which
such Restricted Award is granted. During the Restriction Period applicable to a
Restricted Award, such Award shall be unvested and a Participant may not sell,
assign, transfer, pledge, encumber or otherwise dispose of or hypothecate such
Award. Upon satisfaction of the vesting schedule and any other applicable
restrictions, terms and conditions, the Participant shall be entitled to receive
payment of the Restricted Award or a portion thereof, as the case may be, as
provided in Section 7.5.
7.5 PAYMENT OF AWARDS.
7.5.1 RESTRICTED STOCK GRANTS. After the
satisfaction and/or lapse of the restrictions, terms and conditions set by the
Committee in respect of a Restricted Award of Restricted Stock, a certificate
for the number of shares of Common Stock issued which are no longer subject to
such restrictions, terms and conditions shall, as soon as practicable
thereafter, be delivered to the Participant. The remaining shares, if any,
issued in respect of such Restricted Stock shall either be forfeited and
canceled, or shall continue to be subject to the restrictions, terms and
conditions set by the Committee, as the case may be.
7.6 SHAREHOLDER RIGHTS. A Participant shall have, with
respect to the shares of Common Stock received under a Restricted Award of
Restricted Stock, all of the rights of a shareholder of the Company, including,
without limitation, the right to vote the shares and to
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receive any cash dividends. Stock dividends issued with respect to such
Restricted Stock shall be treated as additional Awards of Restricted Stock
grants and shall be subject to the same restrictions and other terms and
conditions that apply to the shares of Restricted Stock with respect to which
such stock dividends are issued.
8. PERFORMANCE UNITS.
8.1 TERMS AND CONDITIONS. Awards of Performance Units
shall be subject to the terms and conditions set forth in this Section 8 and any
additional terms and conditions, not inconsistent with the express provisions of
this Plan, as the Committee shall set forth in the relevant Award Agreement.
8.2 PERFORMANCE UNIT GRANTS. A Performance Unit is an
Award of units (with each unit representing such monetary amount as is
designated by the Committee in the Award Agreement) granted to a Participant,
subject to such terms and conditions as the Committee deems appropriate,
including, without limitation, the requirement that the Participant forfeit such
units (or a portion thereof) in the event certain performance criteria are not
met within a designated period of time.
8.3 GRANTS. Subject to Section 5, Performance Units may
be awarded alone or in addition to any other Awards. Subject to the terms of
this Plan, the Committee shall determine the number of Performance Units to be
awarded to a Participant and the Committee may impose different terms and
conditions on any particular Performance Units awarded to any Participant.
8.4 PERFORMANCE GOALS AND PERFORMANCE PERIODS.
Participants receiving Awards of Performance Units shall only earn into and be
entitled to payment in respect of such Awards if the Company, a Subsidiary
and/or a division of the Company specified by the Committee (a "Division")
and/or the Participant satisfy certain performance goals (the "Performance
Goals") during and in respect of a designated performance period as determined
by the Committee (the "Performance Period"). Performance Goals and the
Performance Period shall be established by the Committee in its sole discretion.
Performance Periods may overlap each other from time to time. The Committee
shall establish Performance Goals for each Performance Period prior to, or as
soon as practicable after, the commencement of such Performance Period. The
Committee shall also establish a schedule or schedules for such Performance
Units setting forth the portion of the Award which will be earned or forfeited
based on the degree of achievement, or lack thereof, of the Performance Goals at
the end of the relevant Performance Period. In setting Performance Goals, the
Committee may use, but shall not be limited to, such measures as total
shareholder return, return on equity, return on assets, net earnings per share
growth, comparisons to peer companies, divisional goals, individual or aggregate
Participant performance or such other measure or measures of performance as the
Committee, in its sole discretion, may deem appropriate. Such performance
measures shall be defined as to their respective components and meanings by the
Committee in its sole discretion. During any Performance Period, the Committee
shall have the authority to adjust the Performance Goals in such manner as the
Committee, in its sole discretion, deems appropriate with respect to such
Performance Period. In addition to the Performance Goals, the Committee may also
require a minimum shareholder return (threshold) be attained before
consideration is
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given to any results achieved on the Performance Goals. Should the Company, a
Subsidiary, a Division and/or the Participant achieve the applicable Performance
Goals, but the minimum shareholder return (threshold) is not satisfied, then the
Participant's earning into and right to receive payment under the Performance
Units awarded may be deferred by the Committee for up to two (2) year(s) until
the threshold is satisfied. If the minimum shareholder return (threshold) is not
satisfied within such additional period of time, then the Performance Units
awarded shall lapse and be forfeited.
8.5 PAYMENT OF UNITS. With respect to each Performance
Unit, the Participant shall, if the applicable Performance Goals and minimum
shareholder return (threshold) have been satisfied by the Company, a Subsidiary,
a Division and/or the Participant, as applicable, during the relevant
Performance Period, be entitled to receive payment in an amount equal to the
designated value of each Performance Unit awarded times the number of such
Performance Units so earned. Payment in settlement of earned Performance Units
shall be made as soon as practical following the conclusion of the applicable
Performance Period in cash, in shares of unrestricted Common Stock or in
Restricted Stock, as the Committee, in its sole discretion, shall determine and
provide in the relevant Award Agreement. Should the Company, a Subsidiary, a
Division and/or the Participant satisfy the applicable Performance Goals, but
the minimum shareholder return (threshold) is not satisfied, then the
Participant's earning into and right to receive payment under the Performance
Units awarded may be deferred by the Committee for up to two (2) year(s) until
the threshold is satisfied. If the minimum shareholder return (threshold) is not
satisfied within such additional period of time, then the Performance Units
awarded shall lapse and be forfeited.
9. STOCK PURCHASE RIGHTS.
9.1 TERMS AND CONDITIONS. Awards of Stock Purchase Rights
shall be in the form of grants of rights to elect to make payroll deductions to
be used to purchase shares of Common Stock. Stock Purchase Rights Awards shall
be subject to the terms and conditions set forth in this Section 9 and any
additional terms and conditions, not inconsistent with the express terms and
conditions of this Plan, as the Committee shall set forth in the relevant Stock
Purchase Agreement.
9.2 STOCK PURCHASE RIGHTS GRANTS. An Award of Stock
Purchase Rights may be in such form as the Committee may from time to time
approve. Subject to Section 5, Stock Purchase Rights may be awarded alone or in
addition to other Awards. Effective on the Offering Commencement Date of each
Offering Period, each eligible Participant participating in such Offering Period
shall be granted a Stock Purchase Right on the Purchase Date of such Offering
Period, at the applicable Purchase Price, a number of shares of Common Stock
determined by dividing such Employee's total payroll deductions actually made
before such Purchase Date and retained in the Participant's account as of the
Purchase Date by the applicable Purchase Price without adjustment for changes in
the Compensation of the Participant.
9.3 SUBSCRIPTION.
9.3.1 A Participant may exercise Stock Purchase
Rights awarded to him or her by completing a Stock Purchase Subscription
Agreement authorizing payroll deductions in
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the form provided by the Company and filing it with the designated accounting
representative of the Company before the applicable Offering Commencement Date,
unless a later time for submission is set by the Committee for all Participants
with respect to a given Offering Period.
9.3.2 Payroll deductions for a Participant shall
commence on the first payroll date occurring in the January following the
applicable Offering Commencement Date and shall end on the last payroll date in
the November before the Purchase Date of the Offering Period to which such
authorization is applicable, unless sooner terminated by the Participant as
provided in this Section 9.
9.4 OFFERING PERIODS. There shall be consecutive Offering
Periods of twelve (12) months duration under this Plan, with a new Offering
Period commencing on the first Trading Day on or after December 15th each year,
or on such other date as the Committee shall determine, and continuing
thereafter until terminated in accordance with Section 9.12 hereof. The
Committee shall have the power to change the duration and timing of Offering
Periods with respect to future offerings without shareholder approval.
9.5 PAYROLL DEDUCTIONS.
9.5.1 At the time a Participant files his or her
Stock Purchase Agreement, he or she shall elect to have payroll deductions made
on each pay day during the Offering Period in an amount not less than ten
dollars ($10.00) and not more than is permissible under the provisions of
Section 5.
9.5.2 All payroll deductions made for a
Participant shall be credited to his or her account under this Plan. A
Participant may not make any additional payments into such account. A
Participant's account shall be only a bookkeeping account maintained by the
Company, and neither the Company nor any Subsidiary shall be obligated to
segregate or hold in trust or escrow any funds in a Participant's account.
Amounts not expended because of the Plan rule that fractional shares shall not
be purchased shall be refunded to the Participant.
9.5.3 A Participant may discontinue his or her
exercise of Stock Purchase Rights awarded to him or her as provided in Section
9.8 hereof, or may increase or decrease the rate of his or her payroll
deductions during the Offering Period, by completing and filing with the
designated accounting representative of the Company a new Stock Purchase
Subscription Agreement authorizing a change in payroll deduction rate. Unless
otherwise authorized by the Committee, a Participant may not change his or her
payroll deduction rate more than twice during any Offering Period. The change in
rate shall be effective with the first payroll period following thirty (30)
business days after receipt of the new Stock Purchase Subscription Agreement by
the designated accounting representative of the Company unless the Company
elects to process a given change in participation more quickly.
9.5.4 Notwithstanding the foregoing, to the extent
necessary to comply with the limitations of Section 423(b)(8) of the Code and
Section 5 hereof, a Participant's payroll deductions may be decreased to zero
percent (0%) at any time during an Offering Period.
9.5.5 At the time a Stock Purchase Right is
exercised, in whole or in part, or at the time some or all of the Common Stock
issued under this Plan in connection with
63
the Stock Purchase Rights awarded to the Participant is disposed of, the
Participant must make adequate provision for federal, state, or other tax
withholding obligations, if any, arising upon the exercise of the Stock Purchase
Right or the disposition of the Common Stock. The Company may, but shall not be
obligated to, withhold from the Participant's Compensation the amount necessary
for the Company to meet applicable withholding obligations related to the
Participant's tax obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Participant that may be available to
it.
9.6 EXERCISE OF STOCK PURCHASE RIGHT. Unless a
Participant withdraws from participating in the awarding of Stock Purchase
Rights pursuant to this Section 9 as provided in Section 9.8 hereof, his or her
Stock Purchase Rights shall be exercised automatically on the Purchase Date, and
the maximum number of full shares subject to the Stock Purchase Rights shall be
purchased for such Participant at the applicable Purchase Price with the
accumulated payroll deductions in the Participant's account. No fractional
shares shall be purchased; any payroll deductions accumulated in a Participant's
account that are insufficient to purchase a full share shall be retained in the
Participant's account for the subsequent Offering Period, subject to earlier
withdrawal by the Participant as provided in Section 9.8 hereof. Any other funds
left over in a Participant's account after the Purchase Date shall be returned
to the Participant. During a Participant's lifetime, a Participant's Stock
Purchase Rights exercisable only by him or her.
9.7 DELIVERY. As promptly as practicable after each
Purchase Date on which a purchase of shares occurs, the Company shall arrange
for the delivery to each Participant or his or her broker, or to a broker
designated by the Committee, of a stock certificate evidencing the shares
purchased upon exercise of the applicable Stock Purchase Rights. Shares may be
registered in the name of the Participant or jointly in the name of the
Participant and his or her spouse as joint tenants with right of survivorship,
or as community property.
9.8 WITHDRAWAL.
9.8.1 A Participant may withdraw all, but not less
than all, the payroll deductions credited to his or her account and not yet used
to exercise his or her Stock Purchase Rights under this Plan at any time on or
before fifteen (15) calendar days before the Purchase Date by giving written
notice to the designated accounting representative of the Company in the form
provided by the Company. All of the Participant's payroll deductions credited to
his or her account shall be paid to such Participant promptly after receipt of
notice of withdrawal, such Participant's Stock Purchase Rights for the Offering
Period shall automatically be terminated, and no further payroll deductions for
the purchase of shares shall be made for such Offering Period.
9.8.2 A Participant's withdrawal from an Offering
Period shall not have any effect upon his or her eligibility to participate in
any succeeding Offering Period commencing after the termination of the Offering
Period from which the Participant withdraws.
9.9 TERMINATION OF EMPLOYMENT. Upon a Participant's
ceasing to be an Employee for any reason at any time on or before a Purchase
Date of an Offering Period, he or she shall be deemed to have elected to
withdraw from participation in the awarding and exercise
64
of Stock Purchase Rights pursuant to this Section 9, and the payroll deductions
credited to such Participant's account during such Offering Period shall be
returned to such Participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 16.8 hereof, and such Participant's
Stock Purchase Rights shall be automatically terminated.
9.10 INTEREST. No interest shall accrue or be payable on
the payroll deductions of a Participant described in this Section 9.
9.11 MISCELLANEOUS.
9.11.1 No Participant shall have interest or voting
rights in shares covered by any of his or her Stock Purchase Rights or in any
dividends declared by the Company in respect of its outstanding Common Stock
until such Stock Purchase Right has been exercised.
9.11.2 Shares to be delivered to a Participant
under this Section 9 shall be registered in the name of the Participant or in
the name of the Participant and his or her spouse, as designated by the
Participant.
9.11.3 If on a given Purchase Date the number of
shares with respect to which Stock Purchase Rights are to be exercised exceeds
the number of shares then available under this Plan, the Company shall make a
pro rata allocation of the shares remaining available for purchase in as uniform
a manner as shall be practicable and as it shall determine to be equitable.
9.11.4 Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of a Stock
Purchase Right may be assigned, transferred, pledged, or otherwise disposed of
in any way (other than by will, the laws of descent and distribution, or as
provided in Section 16.8 hereof) by the Participant. Any such attempt at
assignment, transfer, pledge, or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds from
an Offering Period in accordance with Section 9.8 hereof.
9.11.5 All payroll deductions received or held by
the Company under this Section 9 shall be general corporate funds and as such
may be used by the Company for any corporate purpose, and the Company shall not
be obligated to segregate such payroll deductions or pay interest thereon.
9.11.6 Individual accounts shall be maintained for
each Participant receiving Stock Purchase Rights under this Section 9.
Statements of account shall be given to Participants at least annually, which
statements shall set forth the amounts of payroll deductions, the Purchase
Price, the number of shares purchased, and the remaining cash balance, if any.
9.12 TERMINATION.
9.12.1 The Committee may at any time and for any
reason terminate the operation of or amend this Section 9. No such termination
shall affect Stock Purchase Rights previously granted, provided that an Offering
Period may be terminated by the Committee on any Purchase Date if the Committee
determines that the termination of the Offering Period is in
65
the best interests of the Company and its shareholders. Except as provided in
this Section 9.11, no amendment may make any change in any Stock Purchase Rights
theretofore granted that adversely affects the rights of any Participant. To the
extent necessary to comply with Section 423 of the Code (or any other applicable
law, regulation, or stock exchange rule), the Company shall obtain shareholder
approval in such manner and to such degree as required.
9.12.2 Without shareholder consent and without
regard to whether any Participant's rights may be considered to have been
"adversely affected," the Committee shall be entitled to: change the Offering
Periods, the maximum amount of permitted payroll deductions, and the frequency
and/or number of permitted changes in the amount withheld during an Offering
Period; establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars; permit payroll withholding in excess of the
amount designated by a Participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections; establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each Participant properly correspond with amounts withheld from the
Participant's Compensation; and establish such other limitations and procedures
as the Committee determines in its sole discretion are advisable.
9.12.3 In the event that the Committee determines
that the ongoing operation of this Section 9 may result in unfavorable financial
accounting consequences, the Committee may, in its discretion and, to the extent
necessary or desirable, modify or amend this Plan to reduce or eliminate such
accounting consequences including, but not limited to:
(a) altering the Purchase Price for any Offering Period,
including an Offering Period underway at the time of the change in
Purchase Price; or
(b) shortening any Offering Period so that the Offering
Period ends on a new Purchase Date, including an Offering Period
underway at the time of the Committee action.
Such modifications or amendments shall not require shareholder approval or the
consent of any Participants under this Section 9.
10. DEFERRAL ELECTIONS. The Committee may permit a Participant to
elect to defer receipt of any payment of cash or any delivery of shares of
Common Stock that would otherwise be due to such Participant by virtue of the
exercise, earn out or settlement of any Award made under Section 6, 7 or 8 of
this Plan. If any such election is permitted, the Committee shall establish
rules and procedures for such deferrals, including, without limitation, the
payment or crediting of reasonable interest on such deferred amounts credited in
cash or the crediting of dividend equivalents in respect of deferred Awards
credited in shares of Common Stock.
11. TERMINATION OF EMPLOYMENT.
11.1 GENERAL. Subject to the terms and conditions of
Section 14 and except as otherwise provided in Section 9 with respect to Stock
Purchase Rights, if, and to the extent, the terms and conditions under which an
Award may be exercised, earned out or settled after a Participant's termination
of employment or a Non-Employee Director ceases to be a director, for
66
any particular reason shall not have been set forth in the relevant Award
Agreement, by and as determined by the Committee in its sole discretion, the
following terms and conditions shall apply as appropriate and as not
inconsistent with the terms and conditions, if any, of such Award Agreement:
11.1.1 Except as otherwise provided in this Section
11.1.1:
(a) If a Participant's employment by the Company or any
of its Subsidiaries is terminated for any reason (other than
Disability, Retirement or death) while Stock Options granted to such
Participant are non-vested, such Participant's rights, if any, to
exercise any non-vested Stock Options, if any, shall immediately
terminate and the Participant (and such Participant's estate,
designated beneficiary or other legal representative) shall forfeit any
rights or interest in or with respect to any such Stock Options. In the
event of Disability, Retirement or death while a Participant's Stock
Options are non-vested, such non-vested Stock Options shall become
vested to the extent determined by the Committee.
(b) The Committee, in its sole discretion, may determine
that vested Stock Options, if any, of a Participant whose employment
terminates other than by reason of death, Disability or Retirement, to
the extent exercisable immediately prior to such termination of
employment, may remain exercisable for a specified time period not to
exceed thirty (30) days after such termination (subject to the
applicable terms and provisions of this Plan [and any rules or
procedures hereunder] and the relevant Award Agreement).
(c) If a Participant's termination of employment is due
to Disability, a Participant shall have the right, subject to the
applicable terms and provisions of this Plan (and any rules or
procedures hereunder) and the relevant Award Agreement, to exercise
Incentive Stock Options, if any, at any time within the period ending
on the earlier of the end of the term of such Incentive Stock Options
and the first anniversary of the date of termination due to Disability
(to the extent such Participant was entitled to exercise any such
Incentive Stock Options immediately prior to such termination).
(d) If a Participant's termination of employment is due
to Retirement, a Participant shall have the right, subject to the
applicable terms and provisions of this Plan (and any rules or
procedures hereunder) and the relevant Award Agreement, to exercise
Incentive Stock Options, if any, at any time within three (3) months
following such termination due to Retirement (to the extent such
Participant was entitled to exercise any such Incentive Stock Options
immediately prior to such termination).
(e) If any Participant dies while entitled to exercise a
Stock Option, if any, such Participant's estate, designated beneficiary
or other legal representative, as the case may be, shall have the
right, subject to the applicable provisions of this Plan (and any rules
or procedures hereunder) and the relevant Award Agreement, to exercise
such Stock Options, if any, at any time within one (1) year from the
date of such Participant's death (but in no event more than one (1)
year from the date of such Participant's termination of
67
employment due to Disability) or three (3) months from the date of such
Participant's termination of employment due to Retirement, as
applicable.
(f) If vested Stock Options held by a Participant whose
employment is terminated by reason of Disability or Retirement are
Non-Qualified Stock Options the Participant shall have the right,
subject to the applicable terms and provisions of this Plan (and any
rules and procedures hereunder) and the relevant Award Agreement, to
exercise such Non-Qualified Stock Options at any time following the
Participant's termination of employment (to the extent the Participant
was entitled to exercise such Non-Qualified Stock Options immediately
prior to such termination) and prior to the expiration date of such
Non-Qualified Stock Options as fixed by the Committee and set forth in
the Award Agreement related thereto.
(g) If a Non-Employee Director ceases to be a director
for any reason (other than Disability, Retirement or death) while
Non-Qualified Stock Options granted to such Non-Employee Director are
non-vested, such Non-Employee Director's rights, if any, to exercise
any non-vested Non-Qualified Stock Options, if any, shall immediately
terminate and the Non-Employee Director (and such Non-Employee
Director's estate, designated beneficiary or other legal
representative) shall forfeit any rights or interest in or with respect
to any such Non-Qualified Stock Options. In the event of the
Disability, Retirement or death of a Non-Employee Director while the
Non-Employee Director's Non-Qualified Stock Options are non-vested,
such non-vested, Non-Qualified Stock Options shall become vested to the
extent determined by the Committee. The Committee, in its sole
discretion, may determine that vested Non-Qualified Stock Options, if
any, of a Non-Employee Director who ceases to be a director other than
by reason of death, Disability or Retirement, to the extent exercisable
immediately prior to such cessation, may remain exercisable for a
specified time period not to exceed thirty (30) days after such
cessation (subject to the applicable terms and provisions of this Plan
[and any rules or procedures hereunder] and the relevant Award
Agreement). If the cessation of a Non-Employee Director's status as a
director is due to Retirement or Disability, the Non-Employee Director
shall have the right, subject to the applicable terms and provisions of
this Plan (and any rules or procedures hereunder) and the relevant
Award Agreement, to exercise such Non-Qualified Stock Options, if any,
at any time within the following such cessation due to Retirement or
Disability (to the extent such Non-Employee Director was entitled to
exercise any such Non-Qualified Stock Options immediately prior to such
cessation) and prior to the expiration date of such Non-Qualified Stock
Options as fixed by the Committee and as set forth in the Award
Agreement related thereto. If any Non-Employee Director dies while
entitled to exercise Non-Qualified Stock Options, such Non-Employee
Director's estate, designated beneficiary or other legal
representative, as the case may be, shall have the right, subject to
the applicable provisions of this Plan (and any rules or procedures
hereunder) and the relevant Award Agreement, to exercise such
Non-Qualified Stock Options, if any, at any time within one (1) year
from the date of such Non-Employee Director's death.
11.1.2 If a Participant's employment with the
Company or any of its Subsidiaries is terminated for any reason (other than
Disability, Retirement or death) prior to the satisfaction and/or lapse of the
restrictions, terms and conditions applicable to Restricted
68
Award(s), such Restricted Award or Awards shall be forfeited, unless the
Committee in its discretion determines otherwise. In the event of a
Participant's Disability, Retirement or death during the Restricted Period,
shares of Restricted Stock shall become free of restrictions to the extent
determined by the Committee.
11.1.3 If a Participant's employment with the
Company or any of its Subsidiaries is terminated for any reason (other than
Disability, Retirement or death) prior to the completion of any Performance
Period, all of such Participant's Performance Units earnable in relation to such
Performance Period shall be forfeited. If a Participant's termination of
employment is due to Disability, Retirement or death, the disposition of the
Participation Units of such Participant earnable in the Performance Period in
which such termination occurs will be determined by the Committee in its
discretion.
12. NON-TRANSFERABILITY OF AWARDS.
(a) Except as otherwise provided in Section 12(b), no
Award under this Plan or any Award Agreement, and no rights or
interests therein, shall or may be assigned, transferred, sold,
exchanged, pledged, disposed of or otherwise hypothecated or encumbered
by a Participant or any beneficiary thereof, except by testamentary
disposition or the laws of descent and distribution. No such right or
interest shall be subject to seizure for the payment of the
Participant's (or any beneficiary's) debts, judgments, alimony, or
separation maintenance or be transferable by operation of law in the
event of the Participant's (or any beneficiary's) bankruptcy or
insolvency. Except as otherwise provided in Section 12(b), during the
lifetime of a Participant, Stock Options are exercisable only by the
Participant.
(b) A Participant who holds Non-Qualified Stock Options
(whether such Stock Options were Non-Qualified Stock Options when
awarded or subsequent to the Award thereof became Non-Qualified Stock
Options pursuant to applicable law or any provision of this Plan) may
assign those Non-Qualified Stock Options to a Permitted Assignee (as
defined below) at any time after the Award, but prior to the expiration
date, of such Non-Qualified Stock Options if as of the time of such
transfer (i) a registration statement on Form S-8 (or any successor
form) filed by the Company under the Securities Act of 1933, as in
effect and as amended from time to time, or any successor statute
thereto (the "Securities Act"), with respect to this Plan (and the
Awards granted and shares of Common Stock issuable hereunder) and (ii)
a registration statement on Form S-3 (or any successor form) filed by
the Company under the Securities Act with respect to shares of Common
Stock issuable to Permitted Assignees have been declared effective by
the Securities and Exchange Commission ("SEC") and all applicable state
securities and "blue sky" authorities, and remain in effect. Each such
transferred Non-Qualified Stock Option shall continue to be governed by
the applicable terms and provisions of this Plan (and any rules or
procedures hereunder) and the applicable Award Agreement with the
transferor Participant, and the Permitted Assignee shall be entitled to
the same rights and subject to the same obligations, restrictions,
limitations and prohibitions under this Plan and such Award Agreement
as the transferor Participant, as if such assignment had not taken
place; provided, however, that no Non-Qualified Stock Option assigned
to a Permitted Assignee may be assigned by that Permitted Assignee.
69
The term "Permitted Assignee" shall mean (w) the child, stepchild,
grandchild, parent, step-parent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law of a Participant, including adoptive
relationships, or any person sharing a Participant's household (other than a
tenant or employee), (x) a trust in which persons listed in item (w) have more
than fifty percent of the beneficial interest, (y) a foundation in which persons
listed in item (w), or the Participant, control the management of assets, or (z)
any other entity in which the persons listed in item (w), or the Participant,
own more than fifty percent of the voting interests, who acquires Non-Qualified
Stock Options from a Participant through a gift or domestic relations order.
13. CHANGES IN CAPITALIZATION AND OTHER MATTERS.
13.1 NO CORPORATE ACTION RESTRICTION. The existence of
this Plan, Award Agreements and/or the Awards granted hereunder shall not limit,
affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize (a) any adjustment,
recapitalization, reorganization or other change in the Company's or any
Subsidiary's capital structure or its business, (b) any merger, share exchange
or change in the ownership of the Company or any Subsidiary, (c) any issue of
bonds, debentures, capital, preferred or prior preference stocks ahead of or
affecting the Company's or any Subsidiary's capital stock or the rights thereof,
(d) any dissolution or liquidation of the Company or any Subsidiary, (e) any
sale or transfer of all or any part of the Company's or any Subsidiary's assets
or business, or (f) any other corporate act or proceeding by the Company or any
Subsidiary. No Participant, Permitted Assignee, beneficiary or any other person
shall have any claim against any member of the Board, the Committee, the Company
or any Subsidiary as a result of any such action.
13.2 RECAPITALIZATION ADJUSTMENTS. In the event of any
change in capitalization affecting the Common Stock, including, without
limitation, a stock dividend or other distribution, stock split, reverse stock
split, recapitalization, merger, acquisition, subdivision, split-up, spin-off,
split-off, combination or exchange of shares or other form of reorganization, or
any other change affecting the Common Stock, the Board, in its sole discretion,
may authorize and make such proportionate adjustments, if any, as the Board may
deem appropriate to reflect such change, including, without limitation, with
respect to the aggregate number of shares of the Common Stock for which Awards
in respect thereof may be granted under this Plan, the maximum number of shares
of the Common Stock which may be sold or awarded to any Participant, any number
of shares of the Common Stock covered by each outstanding Award, and the
exercise price, Purchase Price or other price per share of Common Stock in
respect of outstanding Awards.
14. CHANGE IN CONTROL.
14.1 ACCELERATION OF AWARDS VESTING. Except as otherwise
provided in Section 14.2, if a Change in Control of the Company occurs (a) all
Stock Options then unexercised and outstanding shall become fully exercisable as
of the date of the Change in Control, (b) all restrictions, terms and conditions
applicable to all Restricted Stock then outstanding shall be deemed lapsed and
satisfied as of the date of the Change in Control, and (c)
70
all outstanding Performance Units shall be deemed to have been fully earned as
of the date of the Change in Control.
14.2 SIX-MONTH RULE. The provisions of Section 14.1 shall
not apply to any of the Awards described in Section 14.1 that has been granted
and outstanding for less than six (6) months as of the date of the Change in
Control.
14.3 PAYMENT AFTER CHANGE IN CONTROL. Within thirty (30)
days after a Change in Control occurs, (a) the holder of an Award of Restricted
Stock shall receive a new certificate for such shares without the legend set
forth in Section 7.3.2, and (b) the holder of an Award of Performance Units
shall receive payment of the value of such Award in cash.
14.4 TERMINATION AS A RESULT OF A POTENTIAL CHANGE IN
CONTROL. In determining the applicability of Section 14.1, if (a) a
Participant's employment is terminated by the Company or any Subsidiary prior to
a Change in Control without Cause at the request of a Person who has entered
into an agreement with the Company the consummation of which will constitute a
Change in Control, or (b) the Participant terminates his or her employment with
the Company or any Subsidiary for Good Reason prior to a Change in Control and
the circumstance or event which constitutes Good Reason occurs at the request of
the Person described in Section 14.4(a), then for purposes of this Section 14, a
Change in Control shall be deemed to have occurred immediately prior to such
Participant's termination of employment.
14.5 DEFINITIONS. For purposes of this Section 14, the
following words and phrases shall have the meaning specified:
14.5.1 "BENEFICIAL OWNER" shall have the meaning
set forth in SEC Regulation Section 240.13d-3 or any successor regulation.
14.5.2 "CAUSE" shall mean, unless otherwise defined
in an employee Participant's individual employment agreement with the Company or
any Subsidiary (in which case such employment agreement definition shall
govern), (a) the indictment of the Participant for any serious crime, (b) the
willful and continued failure by the Participant to substantially perform the
Participant's duties, as they may be defined from time to time, with the
Participant's primary employer or to abide by the written policies of the
Company or the Participant's primary employer (other than any such failure
resulting from the Participant's incapacity due to physical or mental illness),
or (c) the willful engaging by the Participant in conduct which is demonstrably
and materially injurious to the Company or any Subsidiary, monetarily or
otherwise. For purposes of the preceding sentence, no act shall be considered
"willful" unless done, or omitted to be done, by the Participant not in good
faith and without reasonable belief that such act, or failure to act, was in the
best interests of the Company and its Subsidiaries.
14.5.3 A "CHANGE IN CONTROL" shall be deemed to
have occurred if any one of the following conditions shall have been satisfied:
(a) any Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by any such Person any securities
acquired directly from the Company) representing twenty-five
71
percent (25%) or more of the combined voting power of the Company's
then outstanding securities; or
(b) during any period of twenty-four (24) consecutive
months, individuals who at the beginning of such period constituted the
Board and any new director (other than a director designated by a
Person who has entered into an agreement with the Company to effect a
transaction described in Sections 13.5.3(a), 13.5.3(c) or 13.5.3(d))
whose election or nomination for election to the Board was or is
approved of by a vote of at least two-thirds of the directors at the
beginning of such twenty-four (24) month period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority of the Board; or
(c) the shareholders of the Company approve and the
action is implemented to merge the Company with any other corporation,
to effect a share exchange for the Company's outstanding securities, or
to effect a complete liquidation of the Company, other than a merger,
share exchange, or liquidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being
converted into voting securities of the Surviving Entity), in
combination with the ownership of any trustee or other fiduciary
holding securities under any benefit plan of the Company or any
Subsidiary, more than seventy-five percent (75%) of the combined voting
power of the voting securities of the Company or such Surviving Entity
outstanding immediately after such merger, share exchange or
liquidation; or
(d) the shareholders of the Company approve an agreement
for the sale or disposition by the Company (other than to a Subsidiary)
of all or substantially all of the Company's assets.
Notwithstanding the foregoing, with respect to a particular Participant
a Change in Control shall not include any event, circumstance or transaction
which results from the action of any Person which is or includes, is affiliated
with, or is wholly or partly controlled by one or more executive officers of the
Company or any Subsidiary and in which entity or group the Participant
participates.
14.5.4 "GOOD REASON" for termination by a
Participant of the Participant's employment shall mean, for purposes of this
Section 14, unless otherwise defined in the Participant's individual employment
agreement with the Company or any Subsidiary (in which case such employment
agreement definition shall govern), the occurrence (without the Participant's
consent) of any one of the following:
(a) the assignment to the Participant of any duties
and/or responsibilities substantially and significantly inconsistent
with the nature and status of the Participant's duties and/or
responsibilities immediately prior to any Potential Change in Control,
or a substantial and significant adverse alteration in the nature or
status of the employee's duties and/or responsibilities from those in
effect immediately prior to any such Potential Change in Control;
provided, however, that a redesignation of the Participant's title
shall not under any circumstances constitute Good Reason if the
Participant's overall status
72
among the Company and its Subsidiaries is not substantially and
significantly adversely affected; or
(b) a reduction in the Participant's rate of annual base
salary as in effect on the day prior to the occurrence of a Potential
Change in Control, where "annual base salary" is the Participant's
regular basic annual compensation prior to any reduction therein under
a salary reduction agreement pursuant to Section 401(k) or Section 125
of the Code, and, without limitation, shall not include, fees,
retainers, reimbursements, bonuses, incentive awards, prizes or similar
payments.
14.5.5 "PERSON" shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) thereof; provided, however, a Person shall not include (a) the Company or
any Subsidiary, (b) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a Subsidiary qualified under Section
401(a) of the Code, (c) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (d) a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of securities of the Company.
14.5.6 "POTENTIAL CHANGE IN CONTROL" shall be
deemed to have occurred if any one of the following conditions shall have been
satisfied:
(a) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control; or
(b) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated,
would constitute a Change in Control; or
(c) any Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing ten percent (10%)
or more of the combined voting power of the Company's then outstanding
securities, or any Person increases such Person's beneficial ownership
of such securities by five (5) percentage points or more over the
percentage so owned by such Person on January 1, 2002; or
(d) the Board adopts a resolution to the effect that, for
purposes of this Plan, a Potential Change in Control has occurred.
14.5.7 "SURVIVING ENTITY" shall mean only an entity
in which all or substantially all of the Company's shareholders immediately
before any merger, share exchange or liquidation become shareholders by the
terms of such merger, share exchange or liquidation.
14.6 ADVERSE TAX CONSEQUENCES. If the making of any
payment or payments pursuant to this Section 14 or otherwise would (a) subject
the Participant to an excise tax under Section 4999 of the Code, or any like or
successor section thereto, or (b) result in the Company's loss of a federal
income tax deduction for such payments under Section 280G of the Code, or any
like or successor section thereto (either or both, an "Adverse Tax
Consequence"), then, unless otherwise expressly provided in a relevant Award
Agreement, the payments attributable to this Plan that are "parachute payments"
within the meaning of such Section 280G of the Code shall
73
be reduced, as determined by the Committee in its sole discretion, but after
consultation with the Participant affected, to the extent necessary to avoid any
Adverse Tax Consequence. Any disputes regarding whether any payments to a
Participant would result in an Adverse Tax Consequence shall be resolved by an
opinion of a nationally recognized accounting firm acceptable to the Company and
the Participant (with the Company's independent auditors being deemed
acceptable).
15. AMENDMENT, SUSPENSION AND TERMINATION.
15.1 IN GENERAL. In addition to its rights under Section
9.11 with respect to Stock Purchase Rights, the Board may suspend or terminate
this Plan (or any portion thereof) at any time and may amend this Plan at any
time and from time to time in such respects as the Board may deem advisable to
insure that any and all Awards conform to or otherwise reflect any change in
applicable laws or regulations, or to permit the Company or the Participants to
benefit from any change in applicable laws or regulations, or in any other
respect the Board may deem to be in the best interests of the Company or any
Subsidiary; provided, however, that no such amendment shall, without majority
(or such greater percentage if required by law, charter, by-law or other
regulation or rule) shareholder approval to the extent required by law or the
rules of any exchange upon which the Common Stock is listed, (a) except as
provided in Section 13, materially increase the number of shares of Common Stock
which may be issued under this Plan, (b) materially modify the requirements as
to eligibility for participation in this Plan, (c) materially increase the
benefits accruing to Participants under this Plan, or (d) extend the termination
date of this Plan. No such amendment, suspension or termination shall (i)
materially adversely affect the rights of any Participant under any outstanding
Award, without the consent of such Participant, or (ii) make any change that
would disqualify this Plan, or any other plan of the Company or any Subsidiary
intended to be so qualified, from (A) the exemption provided by SEC Regulation
Section 240.16b-3, or any successor thereto, or (B) the benefits provided under
Section 422 of the Code or any successor thereto.
15.2 AWARD AGREEMENTS. The Committee may amend or modify
at any time and from time to time any outstanding Award and Award Agreement, in
any manner to the extent that the Committee would have had the authority under
this Plan to initially determine the restrictions, terms and provisions of such
Award, including, without limitation, to change the date or dates as of which
Stock Options may be exercised. No such amendment or modification shall,
however, materially adversely affect the rights of any Participant under any
such Award and Award Agreement without the consent of such Participant.
16. MISCELLANEOUS.
16.1 TAX WITHHOLDING. The Company shall have the right to
deduct from any payment or settlement under this Plan, including, without
limitation, the exercise of any Stock Option, or the delivery or vesting of any
shares of Common Stock, Restricted Stock, any federal, state, local or other
taxes of any kind which the Committee, in its sole discretion, deems necessary
to be withheld to comply with the Code and/or any other applicable law, rule or
regulation. If the Committee, in its sole discretion, permits shares of Common
Stock to be used to satisfy any such tax withholding, such Common Stock shall be
valued based on the Fair Market Value of such stock as of the date the tax
withholding is required to be made, such date
74
to be determined by the Committee. The Committee may establish rules limiting
the use of Common Stock to meet withholding requirements by Participants who are
subject to Section 16 of the Exchange Act.
16.2 NO RIGHT TO EMPLOYMENT. Neither the adoption of this
Plan, the granting of any Award, nor the execution of any Award Agreement shall
confer upon any employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, as the case may be, nor shall it
interfere in any way with the right, if any, of the Company or any Subsidiary to
terminate the employment of any employee at any time for any reason.
16.3 UNFUNDED PLAN. This Plan shall be unfunded and the
Company shall not be required to segregate any assets in connection with any
Awards. Any liability of the Company to any person with respect to any Award or
any Award Agreement shall be based solely upon the contractual obligations that
may be created as a result of this Plan or any such Award or Award Agreement. No
such obligation of the Company shall be deemed to be secured by any pledge of,
encumbrance on, or other interest in, any property or asset of the Company or
any Subsidiary. Nothing contained in this Plan or any Award Agreement shall be
construed as creating in respect of any Participant (or beneficiary thereof, any
Permitted Assignee or any other person) any equity or other interest of any kind
in any assets of the Company or any Subsidiary or creating a trust of any kind
or a fiduciary relationship of any kind between the Company, any Subsidiary
and/or any such Participant, any beneficiary, any Permitted Assignee or any
other person.
16.4 PAYMENTS TO A TRUST. The Committee is authorized to
cause to be established a trust agreement or several trust agreements or similar
arrangements from which the Committee may make payments of amounts due or to
become due to any Participants under this Plan.
16.5 OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS.
Payments and other benefits received by a Participant under an Award shall not
be deemed a part of a Participant's Compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or
arrangements, if any, provided by the Company or any Subsidiary unless expressly
provided in such other plans or arrangements, or except where the Board
expressly determines in writing that inclusion of an Award or portion of an
Award should be included to accurately reflect competitive compensation
practices or to recognize that an Award has been made in lieu of a portion of
competitive annual base salary or other cash compensation. Awards may be made in
addition to, in combination with, or as alternatives to, grants, awards or
payments under any other plans or arrangements of the Company or its
Subsidiaries. The existence of this Plan notwithstanding, the Company or any
Subsidiary may adopt such other compensation plans or programs and additional
compensation arrangements as it deems necessary to attract, retain and motivate
employees.
16.6 LISTING, REGISTRATION AND OTHER LEGAL COMPLIANCE. No
Award shall be made and no shares of the Common Stock shall be issued under this
Plan, and no assignment of a Non-Qualified Stock Option to a Permitted Assignee
shall be made, unless legal counsel for the Company shall be satisfied that such
issuance or assignment will be in compliance with all
75
applicable federal and state securities laws and regulations and any other
applicable laws or regulations. The Committee may require, as a condition of any
payment of any Award, share issuance or assignment of Non-Qualified Stock
Options, that certain agreements, undertakings, representations, certificates,
and/or information, as the Committee may deem necessary or advisable, be
executed or provided to the Company to assure compliance with all such
applicable laws or regulations. Certificates for shares of the Restricted Stock
and/or Common Stock delivered under this Plan may be subject to such stock
transfer orders and such other restrictions as the Committee may deem advisable
under the rules, regulations, or other requirements of the SEC, and the Nasdaq,
or any stock exchange on which the Common Stock is listed, and any applicable
federal or state securities law. The Committee may cause a legend or legends to
be put on any such share certificates to make appropriate reference to such
restrictions. In addition, if, at any time specified herein (or in any Award
Agreement) for (a) the making of any determination, (b) the issuance or other
distribution of Restricted Stock and/or Common Stock, or (c) the payment of
amounts to or through a Participant with respect to any Award, any law, rule,
regulation or other requirement of any governmental authority or agency shall
require either the Company, any Subsidiary, any Participant (or any designated
beneficiary or other legal representative) or any Permitted Assignee to take any
action in connection with any such determination, any such shares to be issued
or distributed, any such payment, or the making of any such determination, as
the case may be, shall be deferred until such required action is taken. If at
any time and from time to time the Committee determines, in its sole discretion,
that the listing, registration or qualification of any Award, or any Common
Stock or property covered by or subject to such Award, upon the Nasdaq or any
stock exchange, or under any foreign, federal, state or local securities or
other law, rule or regulation is necessary or desirable as a condition to or in
connection with the granting of such Award or the issuance or delivery of
Restricted Stock and/or Common Stock or other property under such Award or
otherwise, no such Award may be exercised or settled, or paid in Restricted
Stock, Common Stock or other property, unless such listing, registration or
qualification shall have been effected free of any conditions that are not
acceptable to the Committee.
16.7 AWARD AGREEMENTS. Each Participant receiving an Award
shall enter into an Award Agreement with the Company in a form specified by the
Committee. Each such Participant shall agree to the restrictions, terms and
conditions of the Award set forth therein.
16.8 DESIGNATION OF BENEFICIARY. Each Participant to whom
an Award has been made may designate a beneficiary or beneficiaries to receive
any payment which under the terms of this Plan and the relevant Award Agreement
may become payable on or after the Participant's death. At any time, and from
time to time, any such designation may be changed or canceled by the Participant
without the consent of any such beneficiary. Any such designation, change or
cancellation must be on a form provided for that purpose by the Committee and
shall not be effective until received by the Committee. If no beneficiary has
been named by a deceased Participant, or if the designated beneficiaries have
predeceased the Participant, the beneficiary shall be the Participant's estate.
If the Participant designates more than one beneficiary, any payments under this
Plan to such beneficiaries shall be made in equal shares unless the Participant
has expressly designated otherwise, in which case the payments shall be made in
the shares designated by the Participant.
76
16.9 LEAVES OF ABSENCE/TRANSFERS. The Committee shall have
the power to promulgate rules, policies and regulations and to make
determinations, as it deems appropriate, under this Plan in respect of any leave
of absence from the Company or any Subsidiary granted to a Participant. Without
limiting the generality of the foregoing, the Committee may determine whether
any such leave of absence shall be treated as if the Participant has terminated
employment with the Company or any such Subsidiary. If a Participant transfers
within the Company, or to or from any Subsidiary, such Participant shall not be
deemed to have terminated employment as a result of such transfers.
16.10 GOVERNING LAW. This Plan and all actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of North Carolina, without regard to principles of conflict of laws. Any
titles and headings herein are for reference purposes only, and shall in no way
limit, define or otherwise affect the meaning, construction or interpretation of
any provisions of this Plan.
16.11 EFFECTIVE DATE. This Plan became effective as of
February 15, 2002, subject to the condition of its approval by a majority of the
First Commerce Corporation shareholders at First Commerce Corporation 2002
Annual Meeting of Shareholders.
77
NON-QUALIFIED STOCK OPTIONS
ASSIGNMENT AND CONSENT
The undersigned holder (hereinafter referred to as "Holder") of
non-qualified options to acquire shares of the common stock (hereinafter
referred to as "NSOs") of Bank of Granite Corporation (hereinafter referred to
as "GRAN") hereby assigns to the undersigned assignee (hereinafter referred to
as "Assignee") NSOs to acquire the number of shares of common stock set forth in
the description of assigned NSOs below and the Holder's rights and obligations
with respect to such assigned NSOs under the Bank of Granite/First Commerce
Corporation Omnibus Stock and Incentive Plan (hereinafter referred to as the
"Plan") and under the "Award Agreement" (as defined in the Plan) evidencing the
grant of such assigned NSOs. The Holder and the Assignee acknowledge and agree
that such assignment is subject to the terms and conditions of the Plan,
including, for example, the provisions of the Plan requiring that the Assignee
be and remain a "Permitted Assignee" as defined under and for the period set
forth in the Plan, and of the Award Agreement.
The Assignee acknowledges and agrees that the Assignee has reviewed and
understands the terms and conditions of both the Plan and the Award Agreement.
The Holder and the Assignee each acknowledges and agrees that he, she or it has
not relied upon GRAN or any of its employees, directors, representatives or
agents for advice or guidance in electing to make or receive the assignment set
forth herein.
Description of assigned NSOs:
______________ Date of Holder's Award Agreement
______________ Number of shares acquirable by Holder
under Award Agreement
______________ Number of NSOs being assigned (i.e.,
number of option shares being assigned)
Executed and agreed to, this the ___ day of ___________, 20___.
HOLDER: ASSIGNEE:
________________________________ ______________________________________
Signature
______________________________________
Please Print Name
______________________________________
Street
______________________________________
City, State and Zip Code
78
______________________________________
Federal Taxpayer Identification Number
Consented to, this the ___ day of ___________, 20___.
BANK OF GRANITE CORPORATION
By: _________________________________
Name and Title
79
PERFORMANCE UNIT AGREEMENT
PURSUANT TO THE
BANK OF GRANITE/FIRST COMMERCE CORPORATION
OMNIBUS STOCK AND INCENTIVE PLAN
* * * * *
Employee:
Agreement Date:
Number of Performance Units granted:
Designated value of each Performance Unit: $
Performance Period:
* * * * *
WHEREAS, THIS PERFORMANCE UNIT AGREEMENT (this "Agreement"), dated as
of the Agreement Date specified above, by and between Bank of Granite
Corporation, a Delaware corporation ("GRAN"), and the Employee specified above,
is entered into pursuant to the Bank of Granite/First Commerce Corporation
Omnibus Stock and Incentive Plan, as in effect and as amended from time to time
(the "Plan"); and
WHEREAS, the Employee is regarded as a key employee of GRAN or one or
more of its Subsidiaries; and
WHEREAS, the Committee has determined that it would be to the advantage
and in the best interests of GRAN to grant the Performance Units provided for
herein to the Employee as an inducement to commence service with, or to remain
in the service of, GRAN (or one of its Subsidiaries) and as an incentive for
increased effort during such service;
NOW, THEREFORE, in consideration of the premises and subject to the
terms and conditions set forth herein and in the Plan, the parties hereto
mutually covenant and agree as follows.
1. INCORPORATION BY REFERENCE; PLAN DOCUMENT RECEIPT. This
Agreement is subject in all respects to the terms and provisions of the Plan,
all of which terms and provisions are made a part of and incorporated in this
Agreement (as if they were expressly set forth herein). Any capitalized term not
defined in this Agreement shall have the meaning as is ascribed thereto under
the Plan. The Employee hereby acknowledges receipt of a true copy of the Plan
and that the Employee has read the Plan carefully and fully understands its
content.
80
2. GRANT OF PERFORMANCE UNITS. GRAN hereby grants to the Employee
number of Performance Units specified above, subject to the achievement of the
Performance Goals set forth on Schedule A attached hereto.
3. PAYMENT OF PERFORMANCE UNITS.
3.1. If the Employee is or has been employed by GRAN or
any Subsidiary during the Performance Period specified above, and as of the last
day of such Performance Period the Performance Goals and threshold requirements
set forth on Schedule A have been achieved (or partially achieved) and exceeded
threshold requirements, the Employee shall be entitled to receive payment as
determined by the Committee in good faith in accordance with terms and provision
of this Agreement and the Plan (and at the time specified in the Plan). Should
the Company, Division and/or Participant achieve the applicable Performance
Goals, but the minimum shareholder return (threshold) falls below the minimum
expectations, then the Award opportunity may be deferred by the Committee for up
to two (2) years until the threshold is exceeded. If the minimum shareholder
return (threshold) is not achieved within such additional period of time, then
no Award shall be paid. Payment shall be made in the form of [cash] [Restricted
Stock] [unrestricted Common Stock] [Mark through all but one of options and
initial].
3.2. Unless otherwise provided, if the Employee's
employment with GRAN and its Subsidiaries is terminated for any reason prior to
the end of the Performance Period specified above, the Employee's then
outstanding unearned Performance Units shall be canceled and forfeited in
accordance with Section 11 of the Plan.
4. ASSIGNABILITY. Neither the Employee (nor an Employee's
beneficiary) may sell, exchange, pledge, transfer, assign or otherwise encumber,
hypothecate or dispose of the Performance Units Stock or the Employee's (or such
beneficiary's) interest in or under this Agreement (other than by testamentary
disposition by the Employee or the laws of descent and distribution).
5. AMENDMENTS. The Board and/or the Committee shall have the
right, in their sole discretion, to alter or amend this Agreement from time to
time as provided in the Plan. GRAN shall give written notice to the Employee of
any such alternation or amendment of this Agreement as promptly as practical
after the adoption thereof. This Agreement may also be amended by a writing
signed by both GRAN and the Employee.
6. NOTICE. Any Notice which may be required or permitted under
this Agreement shall be in writing, and may be delivered in person or via
facsimile transmission, overnight courier service or certified mail, postage
pre-paid, properly addressed as follows.
6.1. If such notice is to GRAN, to the attention of
__________________, or at such other address as GRAN, by notice to the Employee,
may designate in writing from time to time.
6.2. If such notice is to the Employee, at the address
shown on the records of GRAN, or at such other address as the Employee, by
notice to GRAN, may designate in writing from time to time.
81
7. GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed
by and shall be construed in accordance with the laws of North Carolina. In the
event of any conflict between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall control.
IN WITNESS WHEREOF, GRAN has caused this Agreement to be executed by
its duly authorized officer, and the Employee has hereunto set his hand, all as
of Option Date specified above.
ATTESTED: BANK OF GRANITE CORPORATION
By: _________________________ By: _______________________________
(Name) (Name)
Title: _________________________ Title: _______________________________
[Corporate Seal]
(Employee)
82
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE
BNAK OF GRANITE/FIRST COMMERCE CORPORATION
OMNIBUS STOCK AND INCENTIVE PLAN
* * * * *
Employee:
Agreement Date:
Number of shares of Restricted Stock granted:
Unrestricted shares of Common Stock to be delivered if employed on the following
specified vesting dates:
Number of Unrestricted
Vesting Dates Shares of Common Stock
------------- ----------------------
1.
2.
3.
4.
5.
* * * * *
WHEREAS, THIS RESTRICTED STOCK AGREEMENT (this "Agreement"), dated as
of the Agreement Date specified above, by and between Bank of Granite
Corporation, a Delaware corporation ("GRAN"), and the Employee specified above,
is entered into pursuant to the Bank of Granite/First Commerce Corporation
Omnibus Stock and Incentive Plan, as in effect and as amended from time to time
(the "Plan"); and
WHEREAS, the Employee is regarded as a key employee of GRAN or one or
more of its Subsidiaries; and
WHEREAS, the Committee has determined that it would be to the advantage
and in the best interests of GRAN to grant the shares of Restricted Stock
provided for herein to the Employee as an inducement to commence service with,
or to remain in the service of, GRAN (or one of its Subsidiaries) and as an
incentive for increased effort during such service;
NOW, THEREFORE, in consideration of the premises and subject to the
terms and conditions set forth herein and in the Plan, the parties hereto
mutually covenant and agree as follows.
83
1. INCORPORATION BY REFERENCE; PLAN DOCUMENT RECEIPT. This
Agreement is subject in all respects to the terms and provisions of the Plan,
all of which terms and provisions are made a part of and incorporated in this
Agreement (as if they were expressly set forth herein). Any capitalized term not
defined in this Agreement shall have the meaning as is ascribed thereto under
the Plan. The Employee hereby acknowledges receipt of a true copy of the Plan
and that the Employee has read the Plan carefully and fully understands its
content.
2. GRANT OF RESTRICTED STOCK. GRAN hereby grants to the Employee
the number of shares of Restricted Stock specified above.
3. DIVIDEND PAYMENTS. On each dividend payment date for shares of
Common Stock the Employee shall be entitled to receive the cash dividend to be
paid holders of record of Common Stock in respect of the outstanding fully-paid
and non-assessable shares of Common Stock.
4. PAYMENT OF SHARES OF RESTRICTED STOCK.
4.1. If the Employee is employed by GRAN or any Subsidiary
on a vesting date specified above, the Employee shall be entitled, in accordance
with the terms and provisions of the Plan and at the time set forth therein, to
receive a new stock certificate (registered in the Employee's name) for the
number of shares of Common Stock set forth opposite such vesting date.
4.2. Unless otherwise provided, if the Employee's
employment with GRAN and its Subsidiaries is terminated for any reason prior to
any vesting date specified above, the Employee's then unvested shares of
Restricted Stock shall be canceled and forfeited in accordance with Section 11
of the Plan.
5. ASSIGNABILITY. Neither the Employee (nor an Employee's
beneficiary) may sell, exchange, pledge, transfer, assign or otherwise encumber,
hypothecate or dispose of the Restricted Stock or the Employee's (or such
beneficiary's) interest in or under this Agreement (other than by testamentary
disposition by the Employee or the laws of descent and distribution).
6. AMENDMENTS. The Board and/or the Committee shall have the
right, in their sole discretion, to alter or amend this Agreement from time to
time as provided in the Plan. GRAN shall give written notice to the Employee of
any such alternation or amendment of this Agreement as promptly as practical
after the adoption thereof. This Agreement may also be amended by a writing
signed by both GRAN and the Employee.
7. NOTICE. Any Notice or other notice which may be required or
permitted under this Agreement shall be in writing, and may be delivered in
person or via facsimile transmission, overnight courier service or certified
mail, postage pre-paid, properly addressed as follows.
7.1. If such notice is to GRAN, to the attention of
_________________, or at such other address as GRAN, by notice to the Employee,
may designate in writing from time to time.
84
7.2. If such notice is to the Employee, at the address
shown on the records of GRAN, or at such other address as the Employee, by
notice to GRAN, may designate in writing from time to time.
8. GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed
by and shall be construed in accordance with the laws of North Carolina. In the
event of any conflict between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall control.
IN WITNESS WHEREOF, GRAN has caused this Agreement to be executed by
its duly authorized officer, and the Employee has hereunto set his hand, all as
of Option Date specified above.
ATTESTED: BANK OF GRANITE CORPORATION
By: _________________________ By: _______________________________
(Name) (Name)
Title: _________________________ Title: _______________________________
[Corporate Seal]
(Employee)
85
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR KEY EMPLOYEES
PURSUANT TO THE
BANK OF GRANITE/FIRST COMMERCE CORPORATION
OMNIBUS STOCK AND INCENTIVE PLAN
* * * * *
Optionee:
Option Date:
Per Share Exercise Price: $
Number of Option Shares subject to this Option:
Exercisable on the following vesting dates in respect of the following Option
Shares:
Number of Unrestricted
Vesting Dates Shares of Common Stock
------------- ----------------------
1.
2.
3.
4.
5.
* * * * *
WHEREAS, THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement"),
dated as of the Option Date specified above, by and between Bank of Granite
Corporation, a Delaware corporation ("GRAN"), and the Optionee specified above,
is entered into pursuant to the Bank of Granite/First Commerce Corporation
Omnibus Stock and Incentive Plan, as in effect and as amended from time to time
(the "Plan"); and
WHEREAS, the Optionee is regarded as a key employee of GRAN or one or
more of its Subsidiaries; and
WHEREAS, the Committee has determined that it would be to the advantage
and in the best interests of GRAN to grant the Incentive Stock Option provided
for herein to the Optionee as an inducement to commence service with, or to
remain in the service of, GRAN (or one of its Subsidiaries) and as an incentive
for increased effort during such service;
86
NOW, THEREFORE, in consideration of the premises and subject to the
terms and conditions set forth herein and in the Plan, the parties hereto
mutually covenant and agree as follows.
1. INCORPORATION BY REFERENCE; PLAN DOCUMENT RECEIPT. This
Agreement is subject in all respects to the terms and provisions of the Plan,
all of which terms and provisions are made a part of and incorporated in this
Agreement (as if they were expressly set forth herein). Any capitalized term not
defined in this Agreement shall have the meaning as is ascribed thereto under
the Plan. The Optionee hereby acknowledges receipt of a true copy of the Plan
and that the Optionee has read the Plan carefully and fully understands its
content.
2. GRANT OF OPTION. GRAN hereby grants to the Optionee an option
(this "Option") to acquire from GRAN at the Per Share Exercise Price specified
above the aggregate number of shares of Common Stock specified above (the
"Option Shares"). This Option is intended to quality as an Incentive Stock
Option (within the meaning of Section 422 of the Code).
3. CASH PAYMENTS EQUIVALENT TO DIVIDENDS. On each dividend
payment date for shares of Common Stock the Optionee shall not be entitled to
receive a cash payment equal to the dividend which would have been paid to the
Optionee if the number of Option Shares subject to the Option on the record date
immediately preceding such payment date were fully-paid and non-assessable
shares of Common Stock held by the Optionee.
4. EXERCISE OF THIS OPTION.
4.1. Unless otherwise provided in this Agreement or in the
Plan, this Option shall become exercisable on the vesting dates specified above
in respect of the number of Option Shares specified above and shall remain
exercisable during the period ending ten (10) years from the date immediately
prior to the Option Date (the "Option Period").
4.2. The Committee shall have the right, exercising
reasonable discretion, to delay the exercise of this Option by the Optionee in
whole or in part for any reasonable period of time specified by the Committee.
4.3. In no event shall this Option be exercisable for a
fractional share of Common Stock.
5. METHOD OF EXERCISE AND PAYMENT.
5.1. This Option shall be exercised by the Optionee by
delivery to the Director of Personnel of GRAN, or such other officer of GRAN as
the Committee shall designate, on any business day (the "Exercise Date") of a
written notice, in such manner and form as may be required by GRAN, specifying
the number of Option Shares the Optionee then desires to acquire (the "Notice").
The Notice shall be accompanied by payment of the aggregate Per Share Exercise
Price for such number of Option Shares, such payment to be made in the manner
set forth in Section 6.5 of the Plan.
87
5.2. Within a reasonable period of time after the Exercise
Date, GRAN shall deliver to the Optionee certificates for the number of
fully-paid and non-assessable Option Shares acquired by the Optionee, registered
in the name of the Optionee.
6. TERMINATION. Unless otherwise provided, this Option shall
terminate and be of no force or effect in accordance with the terms and
provisions of Section 11 of the Plan, or upon the expiration of the Option
Period (if earlier to occur).
7. ASSIGNABILITY. Except otherwise specifically provided in
Section 12 (b) of the Plan, this Option shall not be sold, exchanged, pledged,
transferred, assigned or otherwise encumbered, hypothecated or disposed of by
the Optionee (or any beneficiary) other than by testamentary disposition by the
Optionee or the laws of descent and distribution. Except as otherwise
specifically provided in such Section 12 (b), this Option is exercisable during
Optionee's lifetime only by the Optionee.
8. AMENDMENTS. The Board and/or the Committee shall have the
right, in their sole discretion, to alter or amend this Agreement from time to
time as provided in the Plan. GRAN shall give written notice to the Optionee of
any such alternation or amendment of this Agreement as promptly as practical
after the adoption thereof. This Agreement may also be amended by a writing
signed by both GRAN and the Optionee.
9. NOTICE. Any Notice or other notice which may be required or
permitted under this Agreement shall be in writing, and may be delivered in
person or via facsimile transmission, overnight courier service or certified
mail, postage pre-paid, properly addressed as follows.
9.1. If such notice is to GRAN, to the attention of
______________________________, or at such other address as GRAN, by notice to
the Optionee, may designate in writing from time to time.
9.2. If such notice is to the Optionee, at the address
shown on the records of GRAN, or at such other address as the Optionee, by
notice to GRAN, may designate in writing from time to time.
10. GOVERNING LAW; CONSTRUCTION. This Agreement shall be governed
by and shall be construed in accordance with the laws of the State of North
Carolina, without regard to principles of conflict of laws. In the event of any
conflict between the terms of this Agreement and the terms of the Plan, the
terms of the Plan shall control.
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IN WITNESS WHEREOF, GRAN has caused this Agreement to be executed by
its duly authorized officer, and the Optionee has hereunto set his hand, all as
of Option Date specified above.
ATTESTED: BANK OF GRANITE CORPORATION
By: _________________________ By: _________________________________
(Name) (Name)
Title: _________________________ By: _________________________________
[Corporate Seal]
(Optionee)
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INCENTIVE STOCK OPTION AGREEMENT
PURSUANT TO THE
BANK OF GRANITE/FIRST COMMERCE CORPORATION
OMNIBUS STOCK AND INCENTIVE PLAN
* * * * *
Optionee:
Option Date:
Per Share Exercise Price: $
Number of Option Shares subject to this Option:
Exercisable on the following vesting dates in respect of the following Option
Shares:
Number of Unrestricted
Vesting Dates Shares of Common Stock
------------- ----------------------
1.
2.
3.
4.
5.
* * * * *
WHEREAS, THIS INCENTIVE STOCK OPTION AGREEMENT (this "Agreement"),
dated as of the Option Date specified above, by and between Bank of Granite
Corporation, a Delaware corporation ("GRAN"), and the Optionee specified above,
is entered into pursuant to the Bank of Granite/First Commerce Corporation
Omnibus Stock and Incentive Plan, as in effect and as amended from time to time
(the "Plan"); and
WHEREAS, the Optionee is regarded as a key employee of GRAN or one or
more of its Subsidiaries; and
WHEREAS, the Committee has determined that it would be to the advantage
and in the best interests of GRAN to grant the Incentive Stock Option provided
for herein to the Optionee as an inducement to commence service with, or to
remain in the service of, GRAN (or one of its Subsidiaries) and as an incentive
for increased effort during such service;
NOW, THEREFORE, in consideration of the premises and subject to the
terms and conditions set forth herein and in the Plan, the parties hereto
mutually covenant and agree as follows.
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1. INCORPORATION BY REFERENCE; PLAN DOCUMENT RECEIPT. This
Agreement is subject in all respects to the terms and provisions of the Plan,
all of which terms and provisions are made a part of and incorporated in this
Agreement (as if they were expressly set forth herein). Any capitalized term not
defined in this Agreement shall have the meaning as is ascribed thereto under
the Plan. The Optionee hereby acknowledges receipt of a true copy of the Plan
and that the Optionee has read the Plan carefully and fully understands its
content.
2. GRANT OF OPTION. GRAN hereby grants to the Optionee an option
(this "Option") to acquire from GRAN at the Per Share Exercise Price specified
above the aggregate number of shares of Common Stock specified above (the
"Option Shares"). This Option is intended to quality as an Incentive Stock
Option (within the meaning of Section 422 of the Code).
3. CASH PAYMENTS EQUIVALENT TO DIVIDENDS. On each dividend
payment date for shares of Common Stock the Optionee shall not be entitled to
receive a cash payment equal to the dividend which would have been paid to the
Optionee if the number of Option Shares subject to the Option on the record date
immediately preceding such payment date were fully-paid and non-assessable
shares of Common Stock held by the Optionee.
4. EXERCISE OF THIS OPTION.
4.1. Unless otherwise provided in this Agreement or in the
Plan, this Option shall become exercisable on the vesting dates specified above
in respect of the number of Option Shares specified above and shall remain
exercisable during the period ending ten years from the date immediately prior
to the Option Date (the "Option Period").
4.2. Pursuant to Section 422(b)(7) of the Code, the Fair
Market Value (determined on the Option Date) of the number of Option Shares with
respect to which this Option is first exercisable in any calendar year shall not
exceed $100,000.
4.3. The Committee shall have the right, exercising
reasonable discretion, to delay the exercise of this Option by the Optionee in
whole or in part for any reasonable period of time specified by the Committee.
4.4. In no event shall this Option be exercisable for a
fractional share of Common Stock.
5. METHOD OF EXERCISE AND PAYMENT.
5.1. This Option shall be exercised by the Optionee by
delivery to the ________________ of GRAN, or such other officer of GRAN as the
Committee shall designate, on any business day (the "Exercise Date") of a
written notice, in such manner and form as may be required by GRAN, specifying
the number of Option Shares the Optionee then desires to acquire (the "Notice").
The Notice shall be accompanied by payment of the aggregate Per Share Exercise
Price for such number of Option Shares, such payment to be made in the manner
set forth in Section 6.5 of the Plan.
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5.2. Within a reasonable period of time after the Exercise
Date, GRAN shall deliver to the Optionee certificates for the number of
fully-paid and non-assessable Option Shares acquired by the Optionee, registered
in the name of the Optionee.
6. TERMINATION. Unless otherwise provided, this Option shall
terminate and be of no force or effect in accordance with the terms and
provisions of Section 11 of the Plan, or upon the expiration of the Option
Period (if earlier to occur).
7. ASSIGNABILITY. Except otherwise specifically provided in
Section 12 (b) of the Plan, this Option shall not be sold, exchanged, pledged,
transferred, assigned or otherwise encumbered, hypothecated or disposed of by
the Optionee (or any beneficiary) other than by testamentary disposition by the
Optionee or the laws of descent and distribution. Except as otherwise
specifically provided in such Section 12 (b), this Option is exercisable during
Optionee's lifetime only by the Optionee.
8. AMENDMENTS. The Board and/or the Committee shall have the
right, in their sole discretion, to alter or amend this Agreement from time to
time as provided in the Plan. GRAN shall give written notice to the Optionee of
any such alternation or amendment of this Agreement as promptly as practical
after the adoption thereof. This Agreement may also be amended by a writing
signed by both GRAN and the Optionee.
9. NOTICE. Any Notice or other notice which may be required or
permitted under this Agreement shall be in writing, and may be delivered in
person or via facsimile transmission, overnight courier service or certified
mail, postage pre-paid, properly addressed as follows.
9.1. If such notice is to GRAN, to the attention of
_________________, or at such other address as GRAN, by notice to the Optionee,
may designate in writing from time to time.
9.2. If such notice is to the Optionee, at the address
shown on the records of GRAN, or at such other address as the Optionee, by
notice to GRAN, may designate in writing from time to time.
10. GOVERNING LAW; CONSTRUCTION. This Agreement shall be
governed by and shall be construed in accordance with the laws of the State of
North Carolina, without regard to principles of conflict of laws. In the event
of any conflict between the terms of this Agreement and the terms of the Plan,
the terms of the Plan shall control.
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IN WITNESS WHEREOF, GRAN has caused this Agreement to be executed by
its duly authorized officer, and the Optionee has hereunto set his hand, all as
of Option Date specified above.
ATTESTED: BANK OF GRANITE CORPORATION
By: _________________________ By: _______________________________
(Name) (Name)
Title: _________________________ Title: _______________________________
[Corporate Seal]
(Optionee)
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STOCK PURCHASE SUBSCRIPTION AGREEMENT
PURSUANT TO THE
BANK OF GRANITE/FIRST COMMERCE CORPORATION
OMNIBUS STOCK AND INCENTIVE PLAN
[ ] Initial Authorization
[ ] Change Authorization
Name of Employee: ________________________________ Employee #_________
(Please Print)
Social Security #_______________ Date of Hire: ______________
(FILL IN THE APPROPRIATE SECTIONS AND SIGN BELOW)
A. INITIAL PAYROLL DEDUCTION AUTHORIZATION
In connection with an Award of Stock Purchase Rights to me under the Bank of
Granite/First Commerce Corporation Omnibus Stock and Incentive Plan, I hereby
authorize Bank of Granite to deduct the following funds from my wages:
$____________ from my pay each pay period. (NOTE: Minimum $10.00 per pay period)
B. CHANGE OR DISCONTINUE PAYROLL DEDUCTION
I authorize Bank of Granite to change the amount of my current
payroll deduction to $___________ per pay period (Note: you may change
the amount of your payroll deduction only once per Offering Period).
I hereby instruct Bank of Granite to discontinue my payroll
deduction.
I UNDERSTAND THAT THE ABOVE AUTHORIZATIONS WILL BE EFFECTIVE AS SOON AS
PROCESSED BY BANK OF GRANITE AND WILL REMAIN IN EFFECT UNTIL SUCH TIME AS I SEND
WRITTEN INSTRUCTIONS TO CHANGE MY AUTHORIZATION.
Signature:_________________________________ Date: _________________
94