Exhibit 10.1
CENTURA BANKS, INC.
OMNIBUS EQUITY COMPENSATION PLAN
AS AMENDED AND RESTATED
EFFECTIVE APRIL 16, 1997
CENTURA BANKS, INC.
OMNIBUS EQUITY COMPENSATION PLAN
TABLE OF CONTENTS
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CENTURA BANKS, INC.
OMNIBUS EQUITY COMPENSATION PLAN
ARTICLE I - GENERAL PROVISIONS
1.1 The Plan is designed for the benefit of the directors, executives and key
employees of the Corporation and its Subsidiaries; to attract and retain
for the Corporation and its Subsidiaries personnel of exceptional
ability; to motivate such personnel through added incentives to make a
maximum contribution to greater profitability; to develop and maintain a
highly competent management team; and to be competitive with other
companies with respect to executive compensation.
1.2 Awards under the Plan may be made to Participants in the form of (i)
Incentive Stock Options; (ii) Nonqualified Stock Options; (iii) Stock
Appreciation Rights; (iv) Restricted Stock; (v) Deferred Stock; (vi)
Stock Awards; (vii) Performance Shares; (viii) Other Stock-Based Awards;
and (ix) other forms of equity-based compensation as may be provided and
are permissible under this Plan and the law.
1.3 The Plan shall be effective November 20, 1990 (the "Effective Date"), as
amended and restated effective April 21, 1993, and further amended and
restated effective April 16, 1997, subject to the approval of Section
3.16 of the Plan by a majority of the votes cast on the issue by the
holders of the Corporation's Common Stock at the first meeting of
stockholders at which directors are to be elected that occurs after
December 31, 1996.
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ARTICLE II - DEFINITIONS
DEFINITIONS. Except where the context otherwise indicates, the following
definitions apply:
2.1 "Acceleration Event" means the occurrence of an event defined in Article
XIII of the Plan.
2.2 "Act" means the Securities Exchange Act of 1934, as now in effect or as
hereafter amended. (All citations to sections of the Act or rules
thereunder are to such sections or rules as they may from time to time be
amended or renumbered.)
2.3 "Agreement" means the written agreement evidencing each Award granted to
a Participant under the Plan.
2.4 "Award" means an award granted to a Participant in accordance with the
provisions of the Plan, including, but not limited to, a Stock Option,
Stock Right, Restricted or Deferred Stock, Stock Award, Performance
Share, Other Stock-Based Award, or any combination of the foregoing.
2.5 "Board" means the Board of Directors of the Corporation.
2.6 "Board-Approved Change in Control" shall have the meaning set forth in
Section 13.3 of the Plan.
2.7 "Change in Control" shall have the meaning set forth in Section 13.2 of
the Plan.
2.8 "Change in Control Price" shall have the meaning set forth in Section
13.9 of the Plan.
2.9 "Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. (All citations to sections of the Code are to such
sections as they may from time to time be amended or renumbered.)
2.10 "Committee" means the Compensation Committee or such other committee as
may be appointed by the Board to administer this Plan pursuant to Article
III. Committee members may also be appointed for such limited purposes as
may be provided by the Board.
2.11 "Corporation" means Centura Banks, Inc., a North Carolina corporation
structured as a registered bank holding company under the Bank Holding
Company Act of 1956, as now in effect or as hereafter amended, and its
successors and assigns. "Corporation" also means Centura Banks, Inc. and
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its Subsidiaries, unless the context clearly indicates otherwise.
2.12 "Deferral Period" means the period commencing on the date an Award of
Deferred Stock is granted and ending on such date as the Committee shall
determine.
2.13 "Deferred Stock" means the stock awarded under Article IX of the Plan.
2.14 "Disability" means disability as determined under procedures established
by the Committee or in any Award.
2.15 "Discount Stock Options" means the Nonqualified Stock Options which
provide for an exercise price of less than the Fair Market Value of the
Stock at the date of the Award.
2.16 "Early Retirement" means retirement from active employment with the
Corporation or any Subsidiary, with the express consent of the Committee,
pursuant to the early retirement provisions established by the Committee
or in any Award.
2.17 "Effective Date" shall have the meaning set forth in Section 1.3 of the
Plan.
2.18 "Elective Deferral Period" shall have the meaning set forth in Section
9.3 of the Plan.
2.19 "Eligible Participant" means any director, executive or key employee of
the Corporation or its Subsidiaries, as shall be determined by the
Committee, as well as any other person whose participation the Committee
determines is in the best interest of the Corporation, subject to
limitations as may be provided by the Code, the Act or the Committee. For
purposes of Article IV and Incentive Stock Options that may be granted
hereunder, the term "Eligible Participant" shall be limited to an
executive or other key employee meeting the qualifications for receipt of
an Incentive Stock Option under the provisions of Section 422 of the
Code.
2.20 "ERISA" means the Employee Retirement Income Security Act of 1974, as now
in effect or as hereafter amended.
2.21 "Fair Market Value" means, with respect to any given day, the closing
price of the Stock reported on the New York Stock Exchange for such day,
or if the Stock was not traded on the New York Stock Exchange on such
day, then on the next day on which the Stock was traded, all as reported
by such source as the Committee may select. The
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Committee may establish an alternative method of determining Fair Market
Value.
2.22 "Incentive Stock Option" means a Stock Option granted under Article IV of
the Plan, and as defined in Section 422 of the Code.
2.23 "Limited Stock Appreciation Rights" means a Stock Right which is
exercisable only in the event of a Change in Control and/or a Potential
Change in Control, as described in Section 6.8 of this Plan, which
provides for an amount payable solely in cash, equal to the excess of the
Stock Appreciation Right Fair Market Value of a share of Stock on the day
the Stock Right is surrendered over the price at which a Participant
could exercise a related Stock Option to purchase the share of Stock.
2.24 "Nonqualified Stock Option" means a Stock Option granted under Article V
of the Plan.
2.25 "Normal Retirement" means retirement from active employment with the
Corporation or any Subsidiary on or after age 65, or pursuant to such
other requirements as may be established by the Committee or in any
Award.
2.26 "Option Grant Date" means, as to any Stock Option, the latest of:
(a) the date on which the Committee grants the Stock Option to the
Participant;
(b) the date the Participant receiving the Stock Option becomes an
employee of the Corporation or its Subsidiaries, to the extent
employment status is a condition of the grant or a requirement of
the Code or the Act; or
(c) such other date (other than the dates described in (i) and (ii)
above) as the Committee may designate.
2.27 "Other Stock-Based Award" means an Award under Article XII of the Plan
that is valued in whole or in part by reference to, or is otherwise based
on, Stock.
2.28 "Participant" means an Eligible Participant to whom an Award of
equity-based compensation has been granted and who has entered into an
Agreement evidencing the Award.
2.29 "Performance Share" means an Award under Article XI of the Plan of a unit
valued by reference to a designated number of shares of Stock, which
value may be paid to the
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Participant by delivery of such property as the Committee shall
determine, including, without limitation, cash, Stock, or any combination
thereof, upon achievement of such Performance Objectives during the
Performance Period as the Committee shall establish at the time of such
Award or thereafter.
2.30 "Performance Objectives" shall have the meaning set forth in Article XI
of the Plan.
2.31 "Performance Period" shall have the meaning set forth in Article XI of
the Plan.
2.32 "Potential Change in Control" shall have the meaning set forth in Section
13.4 of the Plan.
2.33 "Plan" means the Centura Banks, Inc. Omnibus Equity Compensation Plan, as
amended and restated effective April 16, 1997, and as further amended
from time to time.
2.34 "Restricted Stock" means an Award of Stock under Article VIII of the
Plan, which Stock is issued with the restriction that the holder may not
sell, transfer, pledge, or assign such Stock and with such other
restrictions as the Committee, in its sole discretion, may impose
(including, without limitation, any restriction on the right to vote such
Stock, and the right to receive any cash dividends), which restrictions
may lapse separately or in combination at such time or times, in
installments or otherwise, as the Committee may deem appropriate.
2.35 "Restriction Period" means the period commencing on the date an Award of
Restricted Stock is granted and ending on such date as the Committee
shall determine.
2.36 "Retirement" means Normal or Early Retirement.
2.37 "Stock" means shares of Common Stock of the Corporation, as may be
adjusted pursuant to the provisions of Section 3.11.
2.38 "Stock Appreciation Right" means a Stock Right, as described in Article
VI of this Plan, which provides for an amount payable in Stock and/or
cash, as determined by the Committee, equal to the excess of the Fair
Market Value of a share of Stock on the day the Stock Right is exercised
over the price at which the Participant could exercise a related Stock
Option to purchase the share of Stock.
2.39 "Stock Appreciation Right Fair Market Value" means a value established by
the Committee for the exercise of a Stock
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Appreciation Right or a Limited Stock Appreciation Right.
2.40 "Stock Award" means an Award of Stock granted in payment of compensation,
as provided in Article X of the Plan.
2.41 "Stock Option" means an Award under Article IV or V of the Plan of an
option to purchase Stock. A Stock Option may be either an Incentive Stock
Option or a Nonqualified Stock Option.
2.42 "Stock Right" means an Award under Article VI of the Plan. A Stock Right
may be either a Stock Appreciation Right or a Limited Stock Appreciation
Right.
2.43 "Subsidiary" or "Subsidiaries" means:
(a) for the purpose of an Incentive Stock Option, any corporation
(other than the Corporation) in an unbroken chain of corporations
beginning with the Corporation if, at the time of the granting of
the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain;
and
(b) for the purposes of all other types of equity-based compensation
provided for under the Plan, any corporation (or partnership,
joint venture, limited liability company, or other enterprise) of
which the Corporation owns or controls, directly or indirectly,
fifty percent (50%) or more of the outstanding shares of stock
normally entitled to vote for the election of directors (or
comparable equity participation and voting power).
2.44 "Termination of Employment" means the discontinuance of employment of a
Participant with the Corporation or its Subsidiaries for any reason other
than a Transfer. The determination of whether a Participant has
discontinued employment shall be made by the Committee in its discretion.
In determining whether a Termination of Employment has occurred, the
Committee may provide that service as a consultant or service with a
business enterprise in which the Corporation has a significant ownership
interest shall be treated as employment with the Corporation. The
Committee shall have the discretion, exercisable either at the time the
Award is granted or at the time the Participant terminates employment, to
establish as a provision applicable to the exercise of one or more Awards
that during the limited period of
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exercisability following Termination of Employment, the Award may be
exercised not only with respect to the number of shares of Stock for
which it is exercisable at the time of the Termination of Employment but
also with respect to one or more subsequent installments for which the
Award would have become exercisable had the Termination of Employment not
occurred.
2.45 "Transfer" means a change of employment of a Participant within the group
consisting of the Corporation and its Subsidiaries.
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ARTICLE III - ADMINISTRATION
3.1 This Plan shall be administered by the Committee. Members of the
Committee may vote on any matters affecting the administration of the
Plan or the grant of Awards pursuant to the Plan, except that no such
member shall act upon the granting of an Award to himself or herself, but
any such member may be counted in determining the existence of a quorum
at any meeting of the Committee or Board during which action is taken
with respect to the granting of an Award to such member. The Committee,
in its discretion, may delegate to one or more of its members such of its
powers as it deems appropriate. The Committee also may limit the power of
any member to the extent necessary to comply with Rule 16b-3 under the
Act or any other law. Members of the Committee shall be appointed
originally, and as vacancies occur, by the Board, to serve at the
pleasure of the Board. The Board may serve as the Committee, if by the
terms of the Plan all Board members are otherwise eligible to serve on
the Committee.
3.2 The Committee shall meet at such times and places as it determines. A
majority of its members shall constitute a quorum, and the decision of a
majority of those present at any meeting at which a quorum is present
shall constitute the decision of the Committee. A memorandum signed by
all of its members shall constitute the decision of the Committee without
necessity, in such event, for holding an actual meeting.
3.3 The Committee shall have the exclusive right to interpret, construe and
administer the Plan, to select the persons who are eligible to receive an
Award, and to act in all matters pertaining to the granting of an Award
and the contents of the Agreement evidencing the Award, including,
without limitation, the determination of the number of Stock Options,
Stock Rights, shares of Stock or Performance Shares subject to an Award
and the form, terms, conditions and duration of each Award, and any
amendment thereof consistent with the provisions of the Plan. All acts,
determinations and decisions of the Committee made or taken pursuant to
grants of authority under the Plan or with respect to any questions
arising in connection with the administration and interpretation of the
Plan, including the severability of any and all of the provisions
thereof, shall be conclusive, final and binding upon all Participants,
Eligible Participants and their beneficiaries.
3.4 The Committee may adopt such rules, regulations and
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procedures of general application for the administration of this Plan, as
it deems appropriate.
3.5 Without limiting the foregoing Sections 3.1, 3.2, 3.3 and 3.4, and
notwithstanding any other provisions of the Plan, the Committee is
authorized to take such action as it determines to be necessary or
advisable, and fair and equitable to Participants, with respect to an
Award in the event of an Acceleration Event as defined in Article XIII.
Such action may include, but shall not be limited to, establishing,
amending or waiving the forms, terms, conditions and duration of an Award
and the Award Agreement, so as to provide for earlier, later, extended or
additional times for exercise or payments, differing methods for
calculating payments, alternate forms and amounts of payment, an
accelerated release of restrictions or other modifications. The Committee
may take such actions pursuant to this Section 3.5 by adopting rules and
regulations of general applicability to all Participants or to certain
categories of Participants, by including, amending or waiving terms and
conditions in an Award and the Award Agreement, or by taking action with
respect to individual Participants.
3.6 The aggregate number of shares of Stock which are subject to an Award
under the Plan shall be one million five hundred thousand (1,500,000)
shares, plus four percent (4%) of any increase, other than any increase
due to Awards under this Plan or any other similar plan of the
Corporation, in the number of authorized and issued shares of Stock above
the number of authorized and outstanding shares as of the Effective Date.
Such shares of Stock shall be made available from authorized and unissued
shares of the Corporation.
(a) If, for any reason, any shares of Stock or Performance Shares
awarded or subject to purchase under the Plan are not delivered or
purchased, or are reacquired by the Corporation, for reasons
including, but not limited to, a forfeiture of Restricted Stock or
termination, expiration or cancellation of a Stock Option, Stock
Right or Performance Share, or any other termination of an Award
without payment being made in the form of Stock (whether or not
Restricted Stock), such shares of Stock or Performance Shares
shall not be charged against the aggregate number of shares of
Stock available for Award under the Plan, and shall again be
available for Award under the Plan.
(b) For all purposes under the Plan, each Performance
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Share awarded shall be counted as one share of Stock subject to an
Award.
(c) To the extent a Stock Right granted in connection with a Stock
Option is exercised without payment being made in the form of
Stock (whether or not Restricted Stock), the shares of Stock which
otherwise would have been issued upon the exercise of such related
Stock Option shall not be charged against the aggregate number of
shares of Stock subject to an Award under the Plan, and shall
again be available for Award under the Plan.
3.7 Each Award granted under the Plan shall be evidenced by a written Award
Agreement. Each Award Agreement shall be subject to and incorporate (by
reference or otherwise) the applicable terms and conditions of the Plan,
and any other terms and conditions (not inconsistent with the Plan)
required by the Committee.
3.8 The Corporation shall not be required to issue or deliver any
certificates for shares of Stock prior to:
(a) the listing of such shares on any stock exchange on which the
Stock may then be listed; and
(b) the completion of any registration or qualification of such shares
of Stock under any federal or state law, or any ruling or
regulation of any government body which the Corporation shall, in
its discretion, determine to be necessary or advisable.
3.9 All certificates for shares of Stock delivered under the Plan shall also
be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock
exchange upon which the Stock is then listed and any applicable federal
or state laws, and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such
restrictions. In making such determination, the Committee may rely upon
an opinion of counsel for the Corporation.
3.10 Subject to the restrictions on Restricted Stock, as provided in Article
VIII of the Plan and in the Restricted Stock Award Agreement, each
Participant who receives an Award of Restricted Stock shall have all of
the rights of a stockholder with respect to such shares of Stock,
including the right to vote the shares to the extent, if any, such shares
possess voting rights and receive
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dividends and other distributions. Except as provided otherwise in the
Plan or in an Award Agreement, no Participant awarded a Stock Option,
Stock Right, Deferred Stock, Stock Award or Performance Share shall have
any right as a stockholder with respect to any shares of Stock covered by
his or her Stock Option, Stock Right, Deferred Stock, Stock Award or
Performance Share prior to the date of issuance to him or her of a
certificate or certificates for such shares of Stock.
3.11 If any reorganization, recapitalization, reclassification, stock
split-up, stock dividend, or consolidation of shares of Stock, merger or
consolidation of the Corporation or its Subsidiaries or sale or other
disposition by the Corporation or its Subsidiaries of all or a portion of
its assets, any other change in the Corporation's or its Subsidiaries'
corporate structure, or any distribution to stockholders other than a
cash dividend results in the outstanding shares of Stock, or any
securities exchanged therefor or received in their place, being exchanged
for a different number or class of shares of Stock or other securities of
the Corporation, or for shares of Stock or other securities of any other
corporation; or new, different or additional shares or other securities
of the Corporation or of any other corporation being received by the
holders of outstanding shares of Stock, then equitable adjustments shall
be made by the Committee in:
(a) the limitation of the aggregate number of shares of Stock that may
be awarded as set forth in Sections 3.6, 3.16, and 4.1(e) (to the
extent permitted under Section 422 of the Code) of the Plan;
(b) the number and class of Stock that may be subject to an Award, and
which have not been issued or transferred under an outstanding
Award;
(c) the purchase price to be paid per share of Stock under outstanding
Stock Options and the number of shares of Stock to be transferred
in settlement of outstanding Stock Rights; and
(d) the terms, conditions or restrictions of any Award and Award
Agreement, including the price payable for the acquisition of
Stock; provided, however, that all adjustments made as the result
of the foregoing in respect of each Incentive Stock Option shall
be made so that such Stock Option shall continue to be an
Incentive Stock Option, as defined in Section 422 of the Code.
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3.12 In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee
shall be indemnified by the Corporation against reasonable expenses,
including attorney's fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a
party by reason of any action taken or failure to act under or in
connection with the Plan or any Award granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Corporation) or
paid by them in satisfaction of a judgment or settlement in any such
action, suit or proceeding, except as to matters as to which the
Committee member has been negligent or engaged in misconduct in the
performance of his duties; provided, that within sixty (60) days after
institution of any such action, suit or proceeding, a Committee member
shall in writing offer the Corporation the opportunity, at its own
expense, to handle and defend the same.
3.13 The Committee may require each person purchasing shares of Stock pursuant
to a Stock Option or other Award under the Plan to represent to and agree
with the Corporation in writing that he is acquiring the shares of Stock
without a view to distribution thereof. The certificates for such shares
of Stock may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer.
3.14 The Committee shall be authorized to make adjustments in a performance
based criteria or in the terms and conditions of other Awards in
recognition of unusual or nonrecurring events affecting the Corporation
(or any Subsidiary, if applicable) or its financial statements or changes
in applicable laws, regulations or accounting principles. The Committee
may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award Agreement in the manner and to the
extent it shall deem desirable to carry it into effect. In the event the
Corporation (or any Subsidiary, if applicable) shall assume outstanding
employee benefit awards or the right or obligation to make future such
awards in connection with the acquisition of another corporation or
business entity, the Committee may, in its discretion, make such
adjustments in the terms of Awards under the Plan as it shall deem
appropriate.
3.15 The Committee shall have full power and authority to determine whether,
to what extent and under what circumstances, any Award shall be canceled
or suspended.
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In particular, but without limitation, all outstanding Awards to any
Participant shall be canceled if (a) the Participant, without the consent
of the Committee, while employed by the Corporation or any Subsidiary or
after termination of such employment, becomes associated with, employed
by, renders services to, or owns any interest in (other than any
nonsubstantial interest, as determined by the Committee), any business
that is in competition with the Corporation or with any business in which
the Corporation and/or its Subsidiaries have a substantial interest as
determined by the Committee; or (b) is terminated for cause as determined
by the Committee.
3.16 Subject to the limitations of Section 3.6, and pursuant to the
requirements of section 162(m) of the Code and the regulations
promulgated thereunder, and to the extent required thereunder, the
maximum number of shares of Stock with respect to which an Award or
Awards of Stock Options and/or Stock Rights under the Plan may be granted
during any calendar year to any employee shall be fifty thousand (50,000)
shares; provided, however, that if the number of shares of Stock with
respect to which an Award or Awards of Stock Options and/or Stock Rights
under the Plan are granted during a calendar year to any employee is less
than fifty thousand (50,000) shares, or if no Award of Stock Options
and/or Stock Rights under the Plan is granted during any calendar year to
such employee, then the amount of such shortfall shall be carried forward
and added to the maximum number of shares of Stock with respect to which
an Award or Awards of Stock Options and/or Stock Rights under the Plan
may be granted in a subsequent calendar year to such employee.
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ARTICLE IV - INCENTIVE STOCK OPTIONS
4.1 Each provision of this Article IV and of each Incentive Stock Option
granted hereunder shall be construed in accordance with the provisions of
Section 422 of the Code, and any provision hereof that cannot be so
construed shall be disregarded. Incentive Stock Options shall be granted
only to Eligible Participants, each of whom may be granted one or more
such Incentive Stock Options at such time or times determined by the
Committee following the Effective Date until November 20, 2000, subject
to the following conditions:
(a) The Incentive Stock Option price per share of Stock shall be set
in the Award Agreement, but shall not be less than one hundred
percent (100%) of the Fair Market Value of the Stock at the time
of the Option Grant Date.
(b) The Incentive Stock Option and its related Stock Right, if any,
may be exercised in full or in part from time to time within ten
(10) years from the Option Grant Date, or such shorter period as
may be specified by the Committee in the Award; provided, that in
any event, the Incentive Stock Option and related Stock Right
shall lapse and cease to be exercisable upon, or within such
period following, a Termination of Employment as shall have been
determined by the Committee and as specified in the Incentive
Stock Option Award Agreement or its related Stock Right Award
Agreement; provided, however, that such period following a
Termination of Employment shall not exceed three (3) months unless
employment shall have terminated:
(i) as a result of death or Disability, in which event, such
period shall not exceed one year after the date of death or
Disability; and
(ii) as a result of death, if death shall have occurred
following a Termination of Employment and while the
Incentive Stock Option or Stock Right was still
exercisable, in which event, such period shall not exceed
one year after the date of death;
provided, further, that such period following a Termination of
Employment shall in no event extend the original exercise period
of the Incentive Stock Option or any related Stock Right.
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(c) The aggregate Fair Market Value, determined as of the Option Grant
Date, of the shares of Stock with respect to which Incentive Stock
Options are first exercisable during any calendar year by any
Eligible Participant shall not exceed one hundred thousand dollars
($100,000); provided, however, to the extent permitted under
Section 422 of the Code:
(i) if a Participant's employment is terminated by reason of
death, Disability or Retirement and the portion of any
Incentive Stock Option that is otherwise exercisable during
the post-termination period applied without regard to the
one hundred thousand dollar ($100,000) limitation contained
in Section 422 of the Code is greater than the portion of
such option that is immediately exercisable as an Incentive
Stock Option during such post-termination period under
Section 422, such excess shall be treated as a Nonqualified
Stock Option; and
(ii) if the exercise of an Incentive Stock Option is accelerated
by reason of an Acceleration Event, any portion of such
Award that is not exercisable as an Incentive Stock Option
by reason of the one hundred thousand dollar ($100,000)
limitation contained in Section 422 of the Code shall be
treated as a Nonqualified Stock Option.
(d) Incentive Stock Options shall be granted only to an Eligible
Participant who, at the time of the Option Grant Date, does not
own stock possessing more than 10% of the total combined voting
power of all classes of stock of the Corporation; provided,
however, the foregoing restriction shall not apply if at the time
of the Option Grant Date the option price is at least one hundred
ten percent (110%) of the Fair Market Value of the Stock subject
to the Incentive Stock Option and such Incentive Stock Option by
its terms is not exercisable after the expiration of five (5)
years from the Option Grant Date.
(e) Subject to the limitations of Section 3.6, the maximum number of
shares of Stock subject to Incentive Stock Option Awards shall be
one hundred thousand (100,000).
(f) The Committee may adopt any other terms and conditions which it
determines should be imposed for
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the Incentive Stock Option to qualify under Section 422 of the
Code, as well as any other terms and conditions not inconsistent
with this Article IV as determined by the Committee.
4.2 The Committee may at any time offer to buy out for a payment in cash,
Stock, Deferred Stock or Restricted Stock an Incentive Stock Option
previously granted, based on such terms and conditions as the Committee
shall establish and communicate to the Participant at the time that such
offer is made.
4.3 If the Incentive Stock Option Award Agreement so provides, the Committee
may require that all or part of the shares of Stock to be issued upon the
exercise of an Incentive Stock Option shall take the form of Deferred or
Restricted Stock, which shall be valued on the date of exercise, as
determined by the Committee, on the basis of the Fair Market Value of
such Deferred Stock or Restricted Stock determined without regard to the
deferral limitations and/or forfeiture restrictions involved.
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ARTICLE V - NONQUALIFIED STOCK OPTIONS
5.1 One or more Stock Options may be granted as Nonqualified Stock Options to
Eligible Participants to purchase shares of Stock at such time or times
determined by the Committee, following the Effective Date, subject to the
terms and conditions set forth in this Article V.
5.2 The Nonqualified Stock Option price per share of Stock shall be
established in the Award Agreement and may be less than one hundred
percent (100%) of the Fair Market Value at the time of the grant, or at
such later date as the Committee shall determine.
5.3 The Nonqualified Stock Option and its related Stock Right, if any, may be
exercised in full or in part from time to time within such period as may
be specified by the Committee or in the Award Agreement; provided, that,
in any event, the Nonqualified Stock Option and the related Stock Right
shall lapse and cease to be exercisable upon, or within such period
following, Termination of Employment as shall have been determined by the
Committee and as specified in the Nonqualified Stock Option Award
Agreement or Stock Right Award Agreement; provided, however, that such
period following Termination of Employment shall not exceed three (3)
months unless employment shall have terminated:
(a) as a result of Retirement or Disability, in which event, such
period shall not exceed one year after the date of Retirement or
Disability, or within such longer period as the Committee may
specify; and
(b) as a result of death, or if death shall have occurred following a
Termination of Employment and while the Nonqualified Stock Option
or Stock Right was still exercisable, in which event, such period
may exceed one year after the date of death, as provided by the
Committee or in the Award Agreement.
5.4 The Nonqualified Stock Option Award Agreement may include any other terms
and conditions not inconsistent with this Article V or in Article VII, as
determined by the Committee.
17
ARTICLE VI - STOCK APPRECIATION RIGHTS
6.1 A Stock Appreciation Right may be granted to an Eligible Participant in
connection with an Incentive Stock Option or a Nonqualified Stock Option
granted under Article IV or Article V of this Plan, or may be granted
independent of any related Stock Option.
6.2 A related Stock Appreciation Right shall entitle a holder of a Stock
Option, within the period specified for the exercise of the Stock Option,
to surrender the unexercised Stock Option (or a portion thereof) and to
receive in exchange therefor a payment in cash or shares of Stock having
an aggregate value equal to the amount by which the Fair Market Value of
each share of Stock exceeds the Stock Option price per share of Stock,
times the number of shares of Stock under the Stock Option, or portion
thereof, which is surrendered.
6.3 Each related Stock Appreciation Right granted hereunder shall be subject
to the same terms and conditions as the related Stock Option, including
limitations on transferability, if any, and shall be exercisable only to
the extent such Stock Option is exercisable and shall terminate or lapse
and cease to be exercisable when the related Stock Option terminates or
lapses. The grant of Stock Appreciation Rights related to Incentive Stock
Options must be concurrent with the grant of the Incentive Stock Options.
With respect to Nonqualified Stock Options, the grant either may be
concurrent with the grant of the Nonqualified Stock Options, or in
connection with Nonqualified Stock Options previously granted under
Article V, which are unexercised and have not terminated or lapsed.
6.4 The Committee shall have sole discretion to determine in each case
whether the payment with respect to the exercise of a Stock Appreciation
Right will be in the form of all cash, all Stock, or any combination
thereof. If payment is to be made in Stock, the number of shares of Stock
shall be determined based on the Fair Market Value of the Stock on the
date of exercise. If the Committee elects to make full payment in Stock,
no fractional shares of Stock shall be issued and cash payments shall be
made in lieu of fractional shares.
6.5 The Committee shall have sole discretion as to the timing of any payment
made in cash, Stock, or a combination thereof, upon exercise of Stock
Appreciation Rights. Payment may be made in a lump sum, in annual
installments
18
or may be otherwise deferred; and the Committee shall have sole
discretion to determine whether any deferred payments may bear amounts
equivalent to interest or cash dividends.
6.6 Upon exercise of a Stock Appreciation Right, the number of shares of
Stock subject to exercise under any related Stock Option shall
automatically be reduced by the number of shares of Stock represented by
the Stock Option or portion thereof which is surrendered.
6.7 The Committee, in its sole discretion, may also provide that, in the
event of a Change in Control and/or a Potential Change in Control, the
amount to be paid upon the exercise of a Stock Appreciation Right or
Limited Stock Appreciation Right shall be based on the Change in Control
Price, subject to such terms and conditions as the Committee may specify
at grant.
6.8 In its sole discretion, the Committee may grant Limited Stock
Appreciation Rights under this Article VI. Limited Stock Appreciation
Rights become exercisable only in the event of a Change in Control and/or
a Potential Change in Control, subject to such terms and conditions as
the Committee, in its sole discretion, may specify at grant. Such Limited
Stock Appreciation Rights shall be settled solely in cash. A Limited
Stock Appreciation Right shall entitle the holder of the related Stock
Option to surrender such Stock Option, or any portion thereof, to the
extent unexercised in respect of the number of shares of Stock as to
which such Limited Stock Appreciation Right is exercised, and to receive
a cash payment equal to the difference between (a) the Stock Appreciation
Right Fair Market Value (at the date of surrender) of a share of Stock
for which the surrendered Stock Option or portion thereof is then
exercisable, and (b) the price at which a Participant could exercise a
related Stock Option to purchase the share of Stock. Such Stock Option
shall, to the extent so surrendered, thereupon cease to be exercisable. A
Limited Stock Appreciation Right shall be subject to such further terms
and conditions as the Committee shall, in its sole discretion, deem
appropriate.
19
ARTICLE VII - INCIDENTS OF STOCK OPTIONS AND STOCK RIGHTS
7.1 Each Stock Option and Stock Right shall be granted subject to such terms
and conditions, if any, not inconsistent with this Plan, as shall be
determined by the Committee, including any provisions as to continued
employment as consideration for the grant or exercise of such Stock
Option or Stock Right and any provisions which may be advisable to comply
with applicable laws, regulations or rulings of any governmental
authority.
7.2 An Incentive Stock Option and its related Stock Right, if any, shall not
be transferable by the Participant other than by will or by the laws of
descent and distribution, and shall be exercisable during the lifetime of
the Participant only by him or by his guardian or legal representative. A
Nonqualified Stock Option and its related Stock Right, if any, shall be
subject to the transferability and exercisability restrictions of the
immediately preceding sentence unless otherwise determined by the
Committee, in its sole discretion, and set forth in the applicable Award
Agreement. Nonqualified Stock Options and their related Stock Rights, if
any, granted prior to the effectiveness of this Section may be amended to
provide for their transferability to the extent, if any, determined by
the Committee, in its sole discretion.
7.3 Shares of Stock purchased upon exercise of a Stock Option shall be paid
for in such amounts, at such times and upon such terms as shall be
determined by the Committee, subject to limitations set forth in the
Stock Option Award Agreement. Without limiting the foregoing, the
Committee may establish payment terms for the exercise of Stock Options
which permit the Participant to deliver shares of Stock (or other
evidence of ownership of Stock satisfactory to the Corporation) with a
Fair Market Value equal to the Stock Option price as payment.
7.4 No cash dividends shall be paid on shares of Stock subject to unexercised
Stock Options. The Committee may provide, however, that a Participant to
whom a Stock Option has been granted which is exercisable in whole or in
part at a future time for shares of Stock shall be entitled to receive an
amount per share equal in value to the cash dividends, if any, paid per
share on issued and outstanding Stock, as of the dividend record dates
occurring during the period between the date of the grant and the time
each such share of Stock is delivered pursuant to exercise of such Stock
Option or the related Stock Right. Such amounts (herein called "dividend
20
equivalents") may, in the discretion of the Committee, be:
(a) paid in cash or Stock either from time to time prior to, or at the
time of the delivery of, such Stock, or upon expiration of the
Stock Option if it shall not have been fully exercised; or
(b) converted into contingently credited shares of Stock (with respect
to which dividend equivalents may accrue) in such manner, at such
value, and deliverable at such time or times, as may be determined
by the Committee.
Such Stock (whether delivered or contingently credited) shall be charged
against the limitations set forth in Section 3.6.
7.5 The Committee, in its sole discretion, may authorize payment of interest
equivalents on dividend equivalents which are payable in cash at a future
time.
7.6 In the event of death or Disability, the Committee, with the consent of
the Participant or his legal representative, may authorize payment, in
cash or in Stock, or partly in cash and partly in Stock, as the Committee
may direct, of an amount equal to the difference at the time between the
Fair Market Value of the Stock subject to a Stock Option and the Option
price in consideration of the surrender of the Stock Option.
7.7 If a Participant is required to pay to the Corporation an amount with
respect to income and employment tax withholding obligations in
connection with exercise of a Nonqualified Stock Option, and/or with
respect to certain dispositions of Stock acquired upon the exercise of an
Incentive Stock Option, the Committee, in its discretion and subject to
such rules as it may adopt, may permit the Participant to satisfy the
obligation, in whole or in part, by making an irrevocable election that a
portion of the total Fair Market Value of the shares of Stock subject to
the Nonqualified Stock Option and/or with respect to certain dispositions
of Stock acquired upon the exercise of an Incentive Stock Option, be paid
in the form of cash in lieu of the issuance of Stock and that such cash
payment be applied to the satisfaction of the withholding obligations.
The amount to be withheld shall not exceed the statutory minimum Federal
and State income and employment tax liability arising from the Stock
Option exercise transaction.
7.8 The Committee may permit the voluntary surrender of all or
21
a portion of any Stock Option granted under the Plan to be conditioned
upon the granting to the Participant of a new Stock Option for the same
or a different number of shares of Stock as the Stock Option surrendered,
or may require such voluntary surrender as a condition precedent to a
grant of a new Stock Option to such Participant. Subject to the
provisions of the Plan, such new Stock Option shall be exercisable at the
same price, during such period and on such other terms and conditions as
are specified by the Committee at the time the new Stock Option is
granted. Upon surrender, the Stock Options surrendered shall be canceled
and the shares of Stock previously subject to them shall be available for
the grant of other Stock Options.
22
ARTICLE VIII - RESTRICTED STOCK
8.1 Restricted Stock Awards may be made to certain Participants as an
incentive for the performance of future services that will contribute
materially to the successful operation of the Corporation and its
Subsidiaries. Awards of Restricted Stock may be made either alone, in
addition to or in tandem with other Awards granted under the Plan and/or
cash payments made outside of the Plan.
8.2 With respect to Awards of Restricted Stock, the Committee shall:
(a) determine the purchase price, if any, to be paid for such
Restricted Stock, which may be equal to or less than par value and
may be zero, subject to such minimum consideration as may be
required by applicable law;
(b) determine the length of the Restriction Period;
(c) determine any restrictions applicable to the Restricted Stock such
as service or performance, other than those set forth in this
Article VIII;
(d) determine if the restrictions shall lapse as to all shares of
Restricted Stock at the end of the Restriction Period or as to a
portion of the shares of Restricted Stock in installments during
the Restriction Period; and
(e) determine if dividends and other distributions on the Restricted
Stock are to be paid currently to the Participant or withheld by
the Corporation or its Subsidiaries for the account of the
Participant.
8.3 Awards of Restricted Stock must be accepted within a period of sixty (60)
days (or such shorter periods as the Committee may specify at grant)
after the Award date, by executing a Restricted Stock Award Agreement and
paying whatever price (if any) is required.
The prospective recipient of a Restricted Stock Award shall not have any
rights with respect to such Award, unless such recipient has executed a
Restricted Stock Award Agreement and has delivered a fully executed copy
thereof to the Committee, and has otherwise complied with the applicable
terms and conditions of such Award.
8.4 Except when the Committee determines otherwise, or as
23
otherwise provided in the Restricted Stock Award Agreement, if a
Participant terminates employment with the Corporation or its
Subsidiaries for any reason before the expiration of the Restriction
Period, all shares of Restricted Stock still subject to restriction shall
be forfeited by the Participant and shall be reacquired by the
Corporation.
8.5 Except as otherwise provided in this Article VIII, no shares of
Restricted Stock received by a Participant shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period.
8.6 To the extent not otherwise provided in a Restricted Stock Award
Agreement, in cases of death, Disability or Retirement or in cases of
special circumstances, the Committee, if it finds that a waiver would be
appropriate, may elect to waive any or all remaining restrictions with
respect to such Participant's Restricted Stock.
8.7 In the event of hardship or other special circumstances of a Participant
whose employment with the Corporation or any Subsidiary is involuntarily
terminated (other than for cause), the Committee may waive in whole or in
part any or all remaining restrictions with respect to any or all of the
Participant's Restricted Stock, based on such factors and criteria as the
Committee may deem appropriate.
8.8 The certificates representing shares of Restricted Stock may either:
(a) be held in custody by the Corporation until the Restriction Period
expires or until restrictions thereon otherwise lapse, and the
Participant shall deliver to the Corporation a stock power
endorsed in blank relating to the Restricted Stock; and/or
(b) be issued to the Participant and registered in the name of the
Participant, and shall bear an appropriate restrictive legend and
shall be subject to appropriate stop-transfer orders.
8.9 Except as provided in this Article VIII, a Participant receiving a
Restricted Stock Award shall have, with respect to the shares of
Restricted Stock covered by any Award, all of the rights of a shareholder
of the Corporation, including the right to vote the shares, to the
extent, if any, such shares possess voting rights, and the right to
receive any dividends; provided, however, the Committee may require that
any dividends on such shares of Restricted Stock shall be automatically
deferred and
24
reinvested in additional Restricted Stock subject to the same
restrictions as the underlying Award, or may require that dividends and
other distributions on Restricted Stock shall be withheld by the
Corporation or its Subsidiaries for the account of the Participant. The
Committee shall determine whether interest shall be paid on amounts
withheld, the rate of any such interest, and the other terms applicable
to such withheld amounts.
8.10 If and when the Restriction Period expires without a prior forfeiture of
the Restricted Stock subject to such Restriction Period, unrestricted
certificates for such shares shall be delivered to the Participant.
8.11 In order to better ensure that Award payments actually reflect the
performance of the Corporation and its Subsidiaries and the service of
the Participant, the Committee may provide, in its sole discretion, for a
tandem performance-based or other Award designed to guarantee a minimum
value, payable in cash or Stock to the recipient of a Restricted Stock
Award, subject to such performance, future service, deferral and other
terms and conditions as may be specified by the Committee.
25
ARTICLE IX - DEFERRED STOCK
9.1 Shares of Deferred Stock (together with cash dividend equivalents, if so
determined by the Committee) may be issued either alone or in addition to
other Awards granted under the Plan in the discretion of the Committee.
The Committee shall determine the individuals to whom, and the time or
times at which, such Awards will be made, the number of shares to be
awarded, the price (if any) to be paid by the recipient of a Deferred
Stock Award, the time or times within which such Awards may be subject to
forfeiture, and all other conditions of the Awards. The Committee may
condition Awards of Deferred Stock upon the attainment of specified
performance goals or such other factors or criteria as the Committee may
determine.
9.2 Deferred Stock Awards shall be subject to the following terms and
conditions:
(a) Subject to the provisions of this Plan and the applicable Award
Agreement, Deferred Stock Awards may not be sold, transferred,
pledged, assigned or otherwise encumbered during the Deferral
Period. At the expiration of the Deferral Period (or the Elective
Deferral Period defined in Section 9.3), share certificates shall
be delivered to the Participant, or his legal representative, in a
number equal to the number of shares of Stock covered by the
Deferred Stock Award.
Based on service, performance and/or such other factors or
criteria as the Committee may determine, the Committee, however,
at or after grant, may accelerate the vesting of all or any part
of any Deferred Stock Award and/or waive the deferral limitations
for all or any part of such Award.
(b) Unless otherwise determined by the Committee, amounts equal to any
dividends that would have been payable during the Deferral Period
with respect to the number of shares of Stock covered by a
Deferred Stock Award if such shares of Stock had been outstanding
shall be automatically deferred and deemed to be reinvested in
additional Deferred Stock, subject to the same deferral
limitations as the underlying Award.
(c) Except to the extent otherwise provided in this Plan or in the
applicable Award Agreement, upon Termination of Employment during
the Deferral Period for a given Award, the Deferred Stock covered
by such
26
Award shall be forfeited by the Participant; provided, however,
the Committee may provide for accelerated vesting in the event of
Termination of Employment due to death, Disability or Retirement,
or in the event of hardship or other special circumstances as the
Committee deems appropriate.
(d) The Committee may require that a designated percentage of the
total Fair Market Value of the shares of Deferred Stock held by
one or more Participants be paid in the form of cash in lieu of
the issuance of Stock and that such cash payment be applied to the
satisfaction of the federal and state income and employment tax
withholding obligations that arise at the time the Deferred Stock
becomes free of all restrictions. The designated percentage shall
be equal to the income and employment tax withholding rate in
effect at the time under federal and applicable state laws.
(e) The Committee may provide one or more Participants subject to the
mandatory cash payment with an election to receive an additional
percentage of the total value of the Deferred Stock in the form of
a cash payment in lieu of the issuance of Deferred Stock. The
additional percentage shall not exceed the difference between
fifty percent (50%) and the designated percentage cash payment.
(f) The Committee may impose such further terms and conditions on
partial cash payments with respect to Deferred Stock as it deems
appropriate.
9.3 A Participant may elect to further defer receipt of Deferred Stock for a
specified period or until a specified event (the "Elective Deferral
Period"), subject in each case to the Committee's approval and to such
terms as are determined by the Committee. Subject to any exceptions
adopted by the Committee, such election must generally be made at least
twelve (12) months prior to completion of the Deferral Period for the
Deferred Stock Award in question (or for the applicable installment of
such an Award).
9.4 Each Award shall be confirmed by, and subject to the terms of, a Deferred
Stock Award Agreement.
9.5 In order to better ensure that the Award actually reflects the
performance of the Corporation or its Subsidiaries and the service of the
Participant, the Committee may provide, in its sole discretion, for a
tandem performance-based or
27
other Award designed to guarantee a minimum value, payable in cash or
Stock to the recipient of a Deferred Stock Award, subject to such
performance, future service, deferral and other terms and conditions as
may be specified by the Committee.
28
ARTICLE X - STOCK AWARDS
10.1 A Stock Award shall be granted only in payment of compensation that has
been earned or as compensation to be earned, including, without
limitation, compensation awarded concurrently with or prior to the grant
of the Stock Award.
10.2 For the purposes of this Plan, in determining the value of a Stock Award,
all shares of Stock subject to such Stock Award shall be valued at not
less than one hundred percent (100%) of the Fair Market Value of such
shares of Stock on the date such Stock Award is granted, regardless of
whether or when such shares of Stock are issued or transferred to the
Participant and whether or not such shares of Stock are subject to
restrictions which affect their value.
10.3 Shares of Stock subject to a Stock Award may be issued or transferred to
the Participant at the time the Stock Award is granted, or at any time
subsequent thereto, or in installments from time to time, as the
Committee shall determine. If any such issuance or transfer shall not be
made to the Participant at the time the Stock Award is granted, the
Committee may provide for payment to such Participant, either in cash or
shares of Stock, from time to time or at the time or times such shares of
Stock shall be issued or transferred to such Participant, of amounts not
exceeding the dividends which would have been payable to such Participant
in respect of such shares of Stock (as adjusted under Section 3.11) if
such shares of Stock had been issued or transferred to such Participant
at the time such Stock Award was granted. Any issuance payable in shares
of Stock under the terms of a Stock Award may, at the discretion of the
Committee, be paid in cash on each date on which delivery of shares of
Stock would otherwise have been made, in an amount equal to the Fair
Market Value on such date of the shares of Stock which would otherwise
have been delivered.
10.4 A Stock Award shall be subject to such terms and conditions, including,
without limitation, restrictions on the sale or other disposition of the
Stock Award or of the shares of Stock issued or transferred pursuant to
such Stock Award, as the Committee shall determine; provided, however,
that upon the issuance or transfer of shares pursuant to a Stock Award,
the Participant, with respect to such shares of Stock, shall be and
become a shareholder of the Corporation fully entitled to receive
dividends, to vote, to the extent, if any, such shares possess voting
29
rights, and to exercise all other rights of a shareholder except to the
extent otherwise provided in the Stock Award. Each Stock Award shall be
evidenced by a written Award Agreement in such form as the Committee
shall determine.
30
ARTICLE XI - PERFORMANCE SHARES
11.1 Awards of Performance Shares may be made to certain Participants as an
incentive for the performance of future services that will contribute
materially to the successful operation of the Corporation and its
Subsidiaries. Awards of Performance Shares may be made either alone, in
addition to or in tandem with other Awards granted under the Plan and/or
cash payments made outside of the Plan.
11.2 With respect to Awards of Performance Shares, which may be issued for no
consideration or such minimum consideration as is required by applicable
law, the Committee shall:
(a) determine and designate from time to time those Participants to
whom Awards of Performance Shares are to be made;
(b) determine the performance period (the "Performance Period") and/or
performance objectives (the "Performance Objectives") applicable
to such Awards;
(c) determine the form of settlement of a Performance Share; and
(d) generally determine the terms and conditions of each such Award.
At any date, each Performance Share shall have a value equal to
the Fair Market Value, determined as set forth in Section 2.15.
11.3 Performance Periods may overlap, and Participants may participate
simultaneously with respect to Performance Shares for which different
Performance Periods are prescribed.
11.4 The Committee shall determine the Performance Objectives of Awards of
Performance Shares. Performance Objectives may vary from Participant to
Participant and between Awards and shall be based upon such performance
criteria or combination of factors as the Committee may deem appropriate,
including for example, but not limited to, minimum earnings per share or
return on equity. If during the course of a Performance Period there
shall occur significant events which the Committee expects to have a
substantial effect on the applicable Performance Objectives during such
period, the Committee may revise such Performance Objectives.
11.5 The Committee shall determine for each Participant the number of
Performance Shares which shall be paid to the
31
Participant if the applicable Performance Objectives are exceeded or met
in whole or in part.
11.6 If a Participant terminates service with the Corporation or its
Subsidiaries during a Performance Period because of death, Disability,
Retirement or under other circumstances in which the Committee in its
discretion finds that a waiver would be appropriate, that Participant, as
determined by the Committee, may be entitled to a payment of Performance
Shares at the end of the Performance Period based upon the extent to
which the Performance Objectives were satisfied at the end of such period
and pro rated for the portion of the Performance Period during which the
Participant was employed by the Corporation or any Subsidiary; provided,
however, the Committee may provide for an earlier payment in settlement
of such Performance Shares in such amount and under such terms and
conditions as the Committee deems appropriate or desirable. If a
Participant terminates service with the Corporation or its Subsidiaries
during a Performance Period for any other reason, then such Participant
shall not be entitled to any payment with respect to that Performance
Period unless the Committee shall otherwise determine.
11.7 Each Award of a Performance Share shall be paid in whole shares of Stock,
or cash, or a combination of Stock and cash as the Committee shall
determine, with payment to be made as soon as practicable after the end
of the relevant Performance Period.
11.8 The Committee shall have the authority to approve requests by
Participants to defer payment of Performance Shares on terms and
conditions approved by the Committee and set forth in a written Award
Agreement between the Participant and the Corporation or its Subsidiaries
entered into in advance of the time of receipt or constructive receipt of
payment by the Participant.
32
ARTICLE XII - OTHER STOCK-BASED AWARDS
12.1 Other awards of Stock and other awards that are valued in whole or in
part by reference to, or are otherwise based on, Stock ("Other
Stock-Based Awards"), including, without limitation, convertible
preferred stock, convertible debentures, exchangeable securities, phantom
stock and Stock awards or options valued by reference to book value or
performance, may be granted either alone or in addition to or in tandem
with Stock Options, Stock Rights, Restricted Stock, Deferred Stock or
Stock Awards granted under the Plan and/or cash awards made outside of
the Plan.
Subject to the provisions of the Plan, the Committee shall have authority
to determine the Eligible Participants to whom and the time or times at
which such Awards shall be made, the number of shares of Stock subject to
such Awards, and all other conditions of the Awards. The Committee also
may provide for the grant of shares of Stock upon the completion of a
specified Performance Period.
The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient.
12.2 Other Stock-Based Awards made pursuant to this Article XII shall be
subject to the following terms and conditions:
(a) Subject to the provisions of this Plan and the Award Agreement,
shares of Stock subject to Awards made under this Article XII may
not be sold, assigned, transferred, pledged or otherwise
encumbered prior to the date on which the shares are issued, or,
if later, the date on which any applicable restriction,
performance or deferral period lapses.
(b) Subject to the provisions of this Plan and the Award Agreement and
unless otherwise determined by the Committee at the time of the
Award, the recipient of an Award under this Article XII shall be
entitled to receive, currently or on a deferred basis, interest or
dividends or interest or dividend equivalents with respect to the
number of shares covered by the Award, as determined at the time
of the Award by the Committee, in its sole discretion, and the
Committee may provide that such amounts (if any) shall be deemed
to have been reinvested in additional Stock or otherwise
reinvested.
33
(c) Any Award under this Article XII and any Stock covered by any such
Award shall vest or be forfeited to the extent so provided in the
Award Agreement, as determined by the Committee, in its sole
discretion.
(d) Upon the Participant's Retirement, Disability or death, or in
cases of special circumstances, the Committee may, in its sole
discretion, waive in whole or in part any or all of the remaining
limitations imposed hereunder (if any) with respect to any or all
of an Award under this Article XII.
(e) Each Award under this Article XII shall be confirmed by, and
subject to the terms of, an Award Agreement.
(f) Stock (including securities convertible into Stock) issued on a
bonus basis under this Article XII may be issued for no cash
consideration.
12.3 Other Stock-Based Awards may include a phantom stock Award, which is
subject to the following terms and conditions:
(a) The Committee shall select the Eligible Participants who may
receive phantom stock Awards. The Eligible Participant shall be
awarded a phantom stock unit, which shall be the equivalent to a
share of Stock.
(b) Under an Award of phantom stock, payment shall be made on the
dates or dates as specified by the Committee or as stated in the
Award Agreement and phantom stock Awards may be settled in cash,
Stock, or some combination thereof.
(c) The Committee shall determine such other terms and conditions of
each Award as it deems necessary in its sole discretion.
34
ARTICLE XIII - ACCELERATION EVENTS
13.1 For the purposes of the Plan, an Acceleration Event shall occur in the
event of a "Potential Change in Control," or "Change in Control" or a
"Board-Approved Change in Control", as those terms are defined below.
13.2 A "Change in Control" shall be deemed to have occurred if:
(a) Any "Person" as defined in Section 3(a)(9) of the Act, including a
"group" (as that term is used in Sections 13(d)(3) and 14(d)(2) of
the Act), but excluding the Corporation and any Subsidiary and any
employee benefit plan sponsored or maintained by the Corporation
and any Subsidiary (including any trustee of such plan acting as
trustee) who:
(i) makes a tender or exchange offer for any shares of the
Corporation's Stock (as defined below) pursuant to which
any shares of the Corporation's Stock are purchased (an
"Offer"); or
(ii) together with its "affiliates" and "associates" (as those
terms are defined in Rule 12b-2 under the Act) becomes the
"Beneficial Owner" (within the meaning of Rule 13d-3 under
the Act) of at least twenty percent (20%) of the
Corporation's Stock (an "Acquisition");
(b) The stockholders of the Corporation approve a definitive agreement
or plan to merge or consolidate the Corporation with or into
another corporation, to sell or otherwise dispose of all or
substantially all of its assets, or to liquidate the Corporation
(individually, a "Transaction"); or
(c) When, during any period of twenty-four (24) consecutive months
during the existence of the Plan, the individuals who, at the
beginning of such period, constitute the Board (the "Incumbent
Directors") cease for any reason other than death to constitute at
least a majority thereof; provided, however, that a director who
was not a director at the beginning of such twenty-four (24) month
period shall be deemed to have satisfied such twenty-four (24)
month requirement (and be an Incumbent Director) if such director
was elected by, or on the recommendation of or with the approval
of, at least two-thirds of the directors who then qualified as
Incumbent Directors
35
either actually (because they were directors at the beginning of such
twenty-four (24) month period) or by prior operation of this Section
13.2(c).
13.3 A "Board-Approved Change in Control" shall be deemed to have occurred if
the Offer, Acquisition or Transaction, as the case may be, is approved by
a majority of the Directors serving as members of the Board at the time
of the Potential Change in Control or Change in Control.
13.4 A "Potential Change in Control" means the happening of any one of the
following:
(a) The approval by stockholders of an agreement by the Corporation,
the consummation of which would result in a Change in Control of
the Corporation, as defined in Section 13.2; or
(b) The acquisition of Beneficial Ownership, directly or indirectly,
by any entity, person or group (other than the Corporation or any
Subsidiary or any Corporation or Subsidiary employee benefit plan
(including any trustee of such plan acting as such trustee)) of
securities of the Corporation representing five percent (5%) or
more of the combined voting power of the Corporation's outstanding
securities and the adoption by the Board of a resolution to the
effect that a Potential Change in Control of the Corporation has
occurred for the purposes of this Plan.
13.5 Upon the occurrence of an Acceleration Event, subject to the approval of
the Committee if the Acceleration Event results from a Board-Approved
Change in Control, all then outstanding Performance Shares with respect
to which the applicable Performance Period has not been completed shall
be paid as soon as practicable as follows:
(a) all Performance Objectives applicable to the Award of Performance
Shares shall be deemed to have been satisfied to the extent
necessary to result in payment of one hundred percent (100%) of
the Performance Shares covered by the Award; and
(b) the applicable Performance Period shall be deemed to have ended on
the date of the Acceleration Event;
(c) the payment to the Participant shall be the amount determined
either by the Committee, in its sole discretion, or in the manner
stated in the Award Agreement. This amount shall then be
multiplied by a
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fraction, the numerator of which is the number of full calendar
months of the applicable Performance Period that have elapsed
prior to the date of the Acceleration Event, and the denominator
of which is the total number of months in the original Performance
Period; and
(d) upon the making of any such payment, the Award Agreement as to
which it relates shall be deemed canceled and of no further force
and effect.
13.6 Upon the occurrence of an Acceleration Event, subject to the approval of
the Committee if the Acceleration Event results from a Board-Approved
Change in Control, the Committee in its discretion may declare any or all
then outstanding Stock Options not previously exercisable and vested as
immediately exercisable and fully vested, in whole or in part.
13.7 Upon the occurrence of an Acceleration Event, subject to the approval of
the Committee if the Acceleration Event results from a Board-Approved
Change in Control, the Committee in its discretion, may declare the
restrictions applicable to Awards of Restricted Stock, Deferred Stock or
Other Stock-Based Awards to have lapsed, in which case the Corporation
shall remove all restrictive legends and stop-transfer orders applicable
to the certificates for such shares of Stock, and deliver such
certificates to the Participants in whose names they are registered.
13.8 The value of all outstanding Stock Option, Stock Rights, Restricted
Stock, Deferred Stock, Performance Shares, Stock Awards and Other
Stock-Based Awards, in each case to the extent vested, shall, unless
otherwise determined by the Committee in its sole discretion at or after
grant but prior to any Change in Control, be cashed out on the basis of
the "Change in Control Price," as defined in Section 13.9 as of the date
such Change in Control or such Potential Change in Control is determined
to have occurred or such other date as the Committee may determine prior
to the Change in Control.
13.9 For purposes of Section 13.8, "Change in Control Price" means the highest
price per share of Stock paid in any transaction reported on the New York
Stock Exchange Composite Index, or paid or offered in any bona fide
transaction related to a Potential or actual Change in Control of the
Corporation at any time during the sixty (60) day period immediately
preceding the occurrence of the Change in Control (or, where applicable,
the occurrence of the Potential Change in Control event), in
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each case as determined by the Committee except that, in the case of
Incentive Stock Options and Stock Appreciation Rights (or Limited Stock
Appreciation Rights) relating to such Incentive Stock Options, such price
shall be based only on transactions reported for the date on which the
optionee exercises such Stock Appreciation Rights (or Limited Stock
Appreciation Rights).
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ARTICLE XIV - AMENDMENT AND TERMINATION
14.1 The Board, upon recommendation of the Committee, or otherwise, at any
time and from time to time, may amend or terminate the Plan as may be
necessary or desirable to implement or discontinue this Plan or any
provision thereof. No amendment, without approval by the Corporation's
stockholders, shall:
(a) alter the group of persons eligible to participate in the Plan;
(b) except as provided in Sections 3.6 and 3.11, increase the maximum
number of shares of Stock or Stock Options or Stock Rights which
are available for Awards under the Plan or increase the maximum
number of shares with respect to which Stock Options or Stock
Rights may be granted to any employee under the Plan;
(c) extend the period during which Incentive Stock Option Awards may
be granted beyond November 20, 2000;
(d) limit or restrict the powers of the Committee with respect to the
administration of this Plan; or
(e) change any of the provisions of this Article XIV.
14.2 No amendment to or discontinuance of this Plan or any provision thereof
by the Board or the stockholders of the Corporation shall, without the
written consent of the Participant, adversely affect, as shall be
determined by the Committee, any Award theretofore granted to such
Participant under this Plan; provided, however, the Committee retains the
right and power to:
(a) annul any Award if the Participant competes against the
Corporation or any Subsidiary or is terminated for cause as
determined by the Committee;
(b) provide for the forfeiture of shares of Stock or other gain under
an Award as determined by the Committee for competing against the
Corporation or any Subsidiary; and
(c) convert any outstanding Incentive Stock Option to a Nonqualified
Stock Option.
14.3 If an Acceleration Event has occurred, no amendment or termination shall
impair the rights of any person with
39
respect to an outstanding Award as provided in Article XIII.
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ARTICLE XV - MISCELLANEOUS PROVISIONS
15.1 Nothing in the Plan or any Award granted hereunder shall confer upon any
Participant any right to continue in the employ of the Corporation or its
Subsidiaries (or to serve as a director thereof) or interfere in any way
with the right of the Corporation or its Subsidiaries to terminate his or
her employment at any time. Unless specifically provided otherwise, no
Award granted under the Plan shall be deemed salary or compensation for
the purpose of computing benefits under any employee benefit plan or
other arrangement of the Corporation or its Subsidiaries for the benefit
of its employees unless the Corporation shall determine otherwise. No
Participant shall have any claim to an Award until it is actually granted
under the Plan. To the extent that any person acquires a right to receive
payments from the Corporation under the Plan, such right shall, except as
otherwise provided by the Committee, be no greater than the right of an
unsecured general creditor of the Corporation. All payments to be made
hereunder shall be paid from the general funds of the Corporation, and no
special or separate fund shall be established and no segregation of
assets shall be made to assure payment of such amounts, except as
provided in Article VIII with respect to Restricted Stock and except as
otherwise provided by the Committee.
15.2 The Corporation may make such provisions and take such steps as it may
deem necessary or appropriate for the withholding of any taxes which the
Corporation or any Subsidiary is required by any law or regulation of any
governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with any Stock Option or the exercise
thereof, any Stock Right or the exercise thereof, or in connection with
any other type of equity-based compensation provided hereunder or the
exercise thereof, including, but not limited to, the withholding of
payment of all or any portion of such Award or another Award under this
Plan until the Participant reimburses the Corporation or its Subsidiaries
for the amount the Corporation or its Subsidiaries is required to
withhold with respect to such taxes, or canceling any portion of such
Award or another Award under this Plan in an amount sufficient to
reimburse itself for the amount it is required to so withhold, or selling
any property contingently credited by the Corporation for the purpose of
paying such Award or another Award under this Plan, in order to withhold
or reimburse itself for the amount it is required to so withhold.
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15.3 The Plan and the grant of Awards shall be subject to all applicable
federal and state laws, rules, and regulations and to such approvals by
any government or regulatory agency as may be required. Any provision
herein relating to compliance with Rule 16b-3 under the Act shall not be
applicable with respect to participation in the Plan by Participants who
are not subject to Section 16(b) of the Act.
15.4 The terms of the Plan shall be binding upon the Corporation, its
Subsidiaries and their successors and assigns.
15.5 Neither a Stock Option, Stock Right, nor any other type of equity-based
compensation provided for hereunder, shall be transferable except as
provided for herein. If any Participant makes such a transfer in
violation hereof, any obligation of the Corporation shall forthwith
terminate.
15.6 This Plan and all actions taken hereunder shall be governed by the laws
of the State of North Carolina, except to the extent preempted by ERISA.
15.7 The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant by the Corporation, nothing contained herein shall give any
such Participant any rights that are greater than those of a general
creditor of the Corporation. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver shares of Stock or payments
in lieu of or with respect to Awards hereunder; provided, however, that,
unless the Committee otherwise determines with the consent of the
affected Participant, the existence of such trusts or other arrangements
is consistent with the "unfunded" status of the Plan.
15.8 Each Participant exercising an Award hereunder agrees to give the
Committee prompt written notice of any election made by such Participant
under Section 83(b) of the Code, or any similar provision thereof.
15.9 If any provision of this Plan or an Award Agreement is or becomes or is
deemed invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan or any Award Agreement under any law deemed
applicable by the Committee, such provision shall be construed or deemed
amended to conform to applicable laws or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the
42
Plan or the Award Agreement, it shall be stricken and the remainder of
the Plan or the Award Agreement shall remain in full force and effect.
CENTURA BANKS, INC.
ATTEST: By: /s/ Frank L. Pattillo
------------------------------
Frank L. Pattillo
Authorized Officer
(Corporate Seal)
/s/ Joseph A. Smith, Jr.
- ------------------------
Joseph, A. Smith, Jr.
Secretary
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