TRIANGLE BANCORP, INC.
1997 DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS
ARTICLE I
DEFINITIONS
1.1 "Account" means the memorandum account for each
Participant in the Plan detailing the shares of Common Stock credited to the
Participant.
1.2 "Administrator" means the administrative officer of the
Company or such other Company officer as shall be appointed by the Board to
administer this Plan.
1.3 "Annual Deferral" means the amount deferred by a Director
during a Plan Period.
1.4 "Beneficiary" means a person or persons, including estates
and trusts, entitled to receive any benefits under this Plan to which the
Director or a prior Beneficiary has become entitled but has not received.
1.5 "Benefit Rate" means an annual rate of interest based on
the yield of six month certificates of deposit of the Bank as of, and adjusted
on, January 1 and July 1 of each calendar year.
1.6 "Board" means the Company's Board of Directors.
1.7 "Common Stock" means the common stock of the Company.
1.8 "Company" means Triangle Bancorp, Inc., a North Carolina
bank holding company.
1.9 "Compensation" means each Participant's compensation paid
by the Company for service as a Director, including retainer payments and
amounts paid for attendance at Board and Board committee meetings.
1.10 "Deferral Date" means January 1, 1997 and the January 1
of each calendar year for which Compensation is deferred thereafter.
1.11 "Director" means a member of the Company's Board of
Directors.
1.12 "Disability" is any physical or mental condition which in
the opinion of the Board makes continued service as a Director inadvisable.
1.13 "Participant" means a Director who participates in the
Plan pursuant to Article III.
1.14 "Plan" means this 1997 Deferred Compensation Plan for
Outside Directors of the Company.
1.15 "Plan Period" means each 12-month period beginning on
January 1 and ending on December 31 thereafter.
ARTICLE II
ELIGIBILITY
Any Director who is a member of the Board on or after December 31, 1996
and who is not also an employee of the Company or any of its subsidiaries, is
eligible to participate in the Plan.
ARTICLE III
DEFERRAL OF COMPENSATION
3.1 Deferral Opportunity. All Compensation paid by the Company
to an eligible Director for a Plan Period shall be deferred; provided, however,
that the Company retains the right in its sole discretion to provide Directors
with the right not to defer receipt of Compensation.
3.2 Deferral Election. If a Director is given the right to
defer receipt of his or her Compensation, an election to defer for a Plan Period
shall be effected by delivery to the Administrator of an election form provided
by the Administrator and signed by the participating Director. For fiscal year
1998 and thereafter, the election must be made in December and shall be
irrevocable for the Plan Period commencing on the next following January 1. The
election shall state the amount of deferred Compensation to be credited to the
Participant's Account as shares of Common Stock.
Any election made pursuant to this Section shall remain in effect for
all subsequent Plan Periods unless a participating Director delivers, amends or
revokes the election by delivering a revised election form to the Administrator
by December 31 of the Plan Period preceding the Plan Period to which the revised
election applies.
3.3 Crediting of Account. The amount of Compensation that is
deferred by a Director under the Plan will be credited to his or her Account on
December 31 of each Plan Period. Effective as of the date the Company shall pay
any cash dividend in respect of its then outstanding shares of Common Stock, the
number of Shares of Common Stock credited to the Director's Account shall be
increased by the number of whole and fractional shares of Common Stock
determined by dividing (a) the trading price of the Common Stock on the trading
day immediately preceding the dividend payment date into (b) the amount of cash
dividend which would have been paid by the Company on the dividend payment date
in respect of the whole and fractional shares of Common Stock credited to the
Director's Account immediately prior to such dividend payment date had such
Common Stock been issued and outstanding on the record date for such dividend.
Dividends will be credited only on the shares of Common Stock recorded in a
Participant's Account on January 1 of each Plan Period.
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ARTICLE IV
PAYMENT OF BENEFIT
4.1 Right to Benefit. Subject to the provisions of Article VI,
a Participant (or his Beneficiary in the case of the Participant's death) shall
be entitled to payment of a benefit hereunder upon the first to occur of the
Participant's death, Disability or retirement as a Director.
4.2 Payment of Common Stock. Deferred Compensation shall be
paid, in the Company's sole discretion, either (a) by the Bank's transferring an
equivalent number of whole shares of Common Stock by issuing authorized but
unissued shares of Common Stock; or (b) by the trustee of a trust established by
the Company in connection with this Plan. Payment shall be made to the
Participant within 60 days after the Participant becomes eligible to receive
such benefits. The Participant shall be paid for fractional shares at the value
of such shares on the date the Participant becomes eligible to receive benefits.
For such purposes, the value of such Common Stock shall be the last trading
price of such Common Stock on the last trading day immediately preceding the
date on which the Participant becomes eligible to receive such benefits.
ARTICLE V
BENEFICIARY
5.1 Designation of Beneficiary. A Participant may designate a
Beneficiary to receive benefits under the Plan by delivery of a written
designation to the Administrator signed by the Participant. If more than one
Beneficiary is named, the share and precedence of each Beneficiary shall be
indicated. A Participant shall have the right to change the Beneficiary by
submitting the change in writing to the Administrator but no change of
Beneficiary shall be effective until acknowledged in writing by the
Administrator.
If no Beneficiary is named pursuant to this Section 5.1, the
Participant's Beneficiary will be the Participant's spouse, if any, or the
Participant's estate, if the Participant has no spouse.
5.2 Payment to Beneficiary. If the Company has any doubt as to
the proper Beneficiary to receive payments under the Plan, the Company shall
have the right to withhold those payment until the matter is finally determined
to the satisfaction of the Administrator. Any payment made by the Company in
good faith and in accordance with this Plan shall fully discharge the Company
from all further obligations with respect to that payment.
In making any payment to or for the benefit of any minor or incompetent
Beneficiary, the Board, in its sole and absolute discretion, may make a
distribution to a legal or natural guardian or other relative of a minor or a
court appointed committee of such incompetent. The Board may also, in its sole
and absolute discretion, make a payment to any adult with whom the minor or
incompetent temporarily or permanently resides. The receipt by a guardian,
committee, relative or other person shall be a complete discharge of the
Company. Neither the Board nor the Company shall have any responsibility to see
to the proper application of any payments so made.
ARTICLE VI
RECAPITALIZATION; REORGANIZATION
6.1 Recapitalization or Stock Dividend. The number of shares
of Common Stock in a Participant's Account shall be proportionately adjusted for
any increase or decrease in the
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number of issued shares of Common Stock resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only on the
Common Stock) or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company.
6.2 Reorganization. Notwithstanding any other provision of the
Plan, in the event of a dissolution or liquidation of the Company or a merger or
a consolidation in which the Company is not the surviving corporation, other
than a merger effected for the purpose of changing the Company's domicile, or
the sale of all or substantially all of the Company's assets, each Participant
shall be entitled to all benefits hereunder immediately prior to such
dissolution, liquidation, merger or consolidation.
6.3 Change in Control. In the event that any person (as such
term is used in Sections 13 (d) and 14 (d) (2) of the Securities Exchange Act of
1934) other than the Company commences a tender or exchange offer for the issued
and outstanding shares of the Company's Common Stock that, if successful, would
result in the acquisition by such person of more than 50% of the total voting
power of all issued and outstanding Common Stock entitled to vote on the
election of Directors (when the shares of Common Stock to which such offer
extends are aggregated with any other shares of Common Stock owned by such
person at the time of commencement of such offer or otherwise acquired by such
person during the pendency of such offer), each Participant shall be immediately
entitled to all benefits hereunder.
6.4 Administration by Board. To the extent that the
adjustments relate to Common Stock or securities of the Company, the adjustments
described in this Article VI shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive.
ARTICLE VII
NATURE OF COMPANY'S OBLIGATION
The Company's obligation under this Plan shall be an unfunded and
unsecured promise to pay benefits in the form of Common Stock. The Company shall
not be obligated under any circumstances to fund its financial obligations under
this Plan. The Plan at all times shall be entirely unfunded as such term is
defined for purposes of the Employee Retirement Income Security Act ("ERISA").
The Administrator may, however, in its sole discretion at any time make
provision for segregating assets of the Company for payment of any benefits
hereunder by establishing a trust to hold such assets.
All assets which the Company may acquire to help cover its financial
liabilities, whether or not held in trust, are and remain general assets of the
Company subject to the claims of its creditors. The Company does not give, and
the Plan does not give, any beneficial ownership interest in any asset of the
Company to a Participant or his or her Beneficiary. All rights of ownership in
any assets are and remain in the Company.
The Company's liability for payment of benefits shall be determined
only under the provisions of this Plan as it may be amended from time to time.
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ARTICLE VIII
PARTICIPANT'S RIGHT TO ASSETS
8.1 Unsecured General Creditor Status. The rights of a
Participant, any Beneficiary or any other person claiming through the
Participant shall be solely those of an unsecured general creditor of the
Company. Such persons shall have the right to receive payments specified under
this Plan only from the Company or from any trust established in connection with
the Plan and have no right to look to any specific or special property separate
from the Company to satisfy a claim for benefit payments.
8.2 No Right to Specific Assets. A Participant, Beneficiary,
or any other person claiming through the Participant shall have no right, claim,
security interest, or any beneficial ownership interest whatsoever in any
general asset that the Company may acquire or use to help support its financial
obligations under this Plan. Any asset used or acquired by the Company in
connection with the liabilities it has assumed under this Plan shall not be
deemed to be held under a funded trust (for purposes of ERISA) for the benefit
of the Participant or his Beneficiary, and no general asset shall be considered
security for the performance of the obligations of the Company. Any such asset
shall remain a general unpledged and unrestricted asset of the Company.
Notwithstanding the above, a Participant or Beneficiary may assert his or her
rights under the Plan against a non-qualified trust established by the Company
in connection with the Plan, subject to the terms of such trust.
A Participant also understands and agrees that his participation in the
acquisition of any asset of the Company shall not constitute a representation to
the Participant, Beneficiary or any person claiming through the Participant or
Beneficiary that any of them has a special or beneficial interest in any asset.
ARTICLE IX
VOTING RIGHTS
No Director or Beneficiary shall be deemed to receive any voting rights
or any other rights and privileges enjoyed by shareholders of the Company by
reason of Common Stock being credited to his or her Account.
ARTICLE X
TERMINATION, AMENDMENT, MODIFICATION OR
SUPPLEMENTATION OF THE PLAN
The Board retains the sole and unilateral right to terminate, amend,
modify or supplement this Plan, in whole or in part, at any time, but only with
respect to future Plan Periods.
ARTICLE XI
RESTRICTION ON ALIENATION OF BENEFITS
No right or benefit under the Plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, pledge, encumber or charge the same shall be
void. No right or benefit hereunder shall in any manner be liable for or subject
to the debts, contracts, liabilities, or torts of the person entitled to
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the benefit. If any Participant or Beneficiary under the Plan should become
bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or
charge any right to a benefit under this Plan, then such right or benefit, in
the discretion of the Board, shall cease. In these circumstances, the Board may
hold or apply the benefit, or any part of it, for the benefit of the Participant
or Beneficiary, spouse, children, or other dependents of the Participant or
Beneficiary, or any of them, in such manner and in such portion as the Board may
deem proper.
ARTICLE XII
ARBITRATION
In the event a Participant or his or her Beneficiary disagrees with the
amount of benefit to be paid as determined by the Administrator and no
satisfactory settlement can be reached, then the claimant may submit the dispute
to binding arbitration under the rules of the American Arbitration Association
then in effect for Raleigh, North Carolina. The decisions of the arbitrator(s)
shall be binding on all parties to the arbitration, and their heirs, successors
and assigns.
ARTICLE XIII
GOVERNING LAW
This Plan shall be governed by the laws of the State of North Carolina.
IN WITNESS WHEREOF, Triangle Bancorp, Inc. does hereby adopt the Plan
as of this the 18th day of November, 1997.
TRIANGLE BANCORP, INC.
By: _________________________
Michael S. Patterson
President and CEO
ATTEST:
By: ___________________________
Susan C. Gilbert, Secretary
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