TRIANGLE BANCORP, INC.
1988 NON-QUALIFIED STOCK OPTION PLAN
Triangle Bancorp, Inc. a bank holding company existing under the laws of
the State of North Carolina (herein referred to as "Company"), hereby adopts the
following Non-Qualified Stock Option Plan (the "Plan") for the directors, local
directors, and other individuals performing services for the Company or any of
its subsidiaries.
1. Purpose. This Plan is intended to advance the interests of the Company
by allowing directors, local board members, officers, and employees of the
Company or any of its subsidiaries, who have substantial responsibility for the
direction and management of the Company or any of its subsidiaries to acquire a
proprietary interest in the Company as an additional incentive to promote the
Company's success, and by encouraging such individuals to continue to provide
their services to the Company or any of its subsidiaries. These aims will be
effectuated by the granting of certain non-statutory, non-qualified stock
options. Options granted under this Plan are referred to hereinafter as
"Options."
2. Plan. The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors ("the Board") of the Company. Subject to
the provisions of the Plan, the Committee shall have full authority, in its
description, to (a) determine the individuals (from the class of individuals
eligible under Section 3 hereof to receive Options under the Plan) to whom
Options shall be granted; (b) determine the time or times at which Options shall
be granted; (c) determine the option price of the shares subject to each Option,
which price shall be not less than the minimum specified in accordance with
Section 5 hereof; (d) determine (subject to Sections 7 and 9 hereof) the time or
times when each Option shall become exercisable and the duration of the
exercise; and (e) interpret the Plan and prescribe, amend, and rescind rules and
regulations relating to it. The interpretation and construction of any provision
of the Plan by the Committee shall be final and conclusive. The Committee may
consult with counsel and other professional advisors, who may be counsel or
advisors to the Company, and shall not incur any liability for any action taken
in good faith in reliance upon the advice of such counsel or advisors.
3. Eligibility. (a) Options may be granted only to members of the Board,
members of the boards of directors or local boards of directors, or officers or
full-time employees of the Company or any of its subsidiaries. In determining
the eligibility of an individual to receive an Option as well as in determining
the number of shares to be optioned to any individual, the Committee shall
consider the position and responsibilities of the individual being considered,
the nature and value to the Company of such individual's services and
accomplishments, the person's present and potential contributions to the success
of the Company and such other factors as the Committee may deem relevant. A
person receiving an Option pursuant to this Plan shall sometimes be referred to
hereinafter as an "Optionee."
(b) Members of the Committee shall be entitled to receive Options under the
Plan to the same extent as other members of the Board. However, any grant of an
Option to a member of the Committee must be approved by a disinterested majority
of the remaining members of the Committee; such member must be excused from any
consideration of a grant of such Option and shall not participate in any manner
in such decision.
4. Shares of Stock Subject to the Plan. There will be reserved for use upon
the exercise of Options to be granted from time to time under the Plan (subject
to the provisions of the provisions of Section 6 hereof) an aggregate of 388,002
as the Committee shall from time to time determine, may be in whole or in part
either authorized but unissued Shares, or issued Shares which shall have been
reacquired by the Company. Any Shares subject to an Option under the Plan, which
Option for any reason expires or is terminated unexercised as to such Shares,
may again be subjected to an Option under the Plan.
5. Option Price. The purchase price under each Option issued shall be
determined by the Committee at the time the Option is granted, but in no event
shall such purchase price be less then 100% of the fair market value of the
Company's Shares on the date of the grant. If the shares are traded in the
over-the-counter market, such fair market value shall be deemed to be the mean
between the asked and the bid prices on such day as reported by NASDAQ. If the
stock is traded on an exchange, such fair market value shall be deemed to be the
mean of the high and low prices at which it generally has the greatest trading
volume. In all cases, any determination hereunder by the Committee as to the
fair market value of the Shares for which Options are granted shall be made in
good faith and shall be determinative for all purposes of this Plan.
6. Adjustment for Dilution, Etc. In the event that there is (a) a
subdivision or consolidation of the Company's common stock or any other capital
adjustment of the Company's common stock, (b) the payment by the Company of a
stock dividend, or (c) any other increase or decrease in the outstanding common
stock of the Company effected without receipt of consideration by the Company,
then the number of Shares then covered by each outstanding Option granted
hereunder shall be adjusted proportionately with no adjustment in the total
purchase price of the Shares then so covered by such Option, and the number of
Shares reserved for the purpose of the Plan shall be adjusted by the same
proportion. All such adjustments shall be made by the Committee, whose
determination upon the same shall be final and binding upon the Optionees. No
fractional Shares shall be issued and any fractional Shares resulting from the
computation pursuant to the Section 6 shall be eliminated from the respective
Option. No adjustment shall be made for cash dividends or the issuance to
stockholders of rights to subscribe for additional Shares or other securities.
7. Duration and Exercise of Options. (a) All Options issued under the Plan
shall be for such period as the Board shall determine, but for not more the ten
years from the date of the grant thereof. The period of the Option, once it is
granted, may be reduced only as outlined in Section 9 hereof; provided, however,
that the Committee may, where the Company is involved in a merger,
consolidation, dissolution, or liquidation, accelerate the expiration date and
the dates on which any part of the Option may be exercisable for all the Shares
covered thereby, but the effectiveness of such acceleration, and exercise of the
Option pursuant thereto in excess of the number of Shares for which it would
have been exercisable in the absence of such acceleration, shall be conditioned
upon the consummation of the merger, consolidation, dissolution, or liquidation.
In no event may an Option be exercised after the expiration of its term.
(b) Except as otherwise modified by the Committee or as otherwise expressly
provided herein, Options granted under this Plan shall become exercisable as
they vest in accordance with this Section 7. An Optionee shall be entitled to
exercise the Option only as to the vested portion of the Shares subject to the
Option, determined in accordance with and based on the whole number of years of
the Optionee's continued service with the Company or any subsidiary of the
Company in said capacity from the date the Option is
2
granted through the date of termination of such services, determined in
accordance with the following schedule:
Years of Vested Percentage
Continued Service of Shares
----------------- ---------
1 33.33%
2 33.33%
3 33.33%
Any Shares not vested in accordance with the chart described hereinabove shall
be forfeited upon the termination of Optionee's services for the Company or any
subsidiary of the Company in one of the capacities indicated in Section 3(a)
hereof, and the Optionee shall have no right to exercise any Options with
respect thereto. In each such case, such limitations shall be calculated, in the
case of any resulting fraction, to the nearest low whole number of Shares. Upon
the termination of an Optionee's services for the Company or any subsidiary of
the Company in one of the capacities indicated in Section 3(a) hereof, any
vested Option or Options granted to him under this Plan which have not
previously expired or been exercised shall be exercisable by the Optionee any
time within one year after such termination.
(c) Subject to limitations contained herein as to the time for exercise of
an Option and the amount of Shares subject to such Option, and notwithstanding
subsection (b) above, each Option shall be exercisable in whole or in part or in
installments at such time or times and in such manner as the Committee may
prescribe and specify in granting the Option to the Optionee, which manner may
differ from the exercise periods otherwise prescribed in subsection (b) above.
No Shares shall be delivered pursuant to any exercise of an Option until the
requirements of such laws and regulations as may be deemed by the Committee to
be applicable to them have been satisfied, and further until receipt by the
Company of the full option price in cash for the Shares for which an Option is
exercised.
(d) No Optionee or his legal representative, legatees, or distributees, as
the case may be, will be, or will be deemed to be, a holder of any Shares
subject to an Option unless and until certificates for such Shares are issued to
him or them under the terms of the plan. Except as otherwise provided herein, no
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
(e) (i) The exercise price of the Shares subject to the Option may be paid
in cash or, at the discretion of the Board, may also be paid by the tender of
Shares already owned by the Optionee, or through a combination of cash and
Shares, or through such other means that the Board determines are consistent
with the Plan's purpose and applicable law. No fractional Shares will be issued
or accepted.
(ii) The exercise price of the Shares subject to the Option may be paid, at
the discretion of the Board, on a "cashless" basis, by delivery to the Company
or its designated agent of an irrevocable written notice of exercise form
together with irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the shares of stock and deliver the sale or margin loan
proceeds directly to the Company to pay the exercise price.
(iii) Receipt of Shares otherwise issuable by the Company upon exercise of
an option by an Optionee may be deferred under a program of delayed receipt
adopted by the Board, which program shall contain such rules governing
eligibility to participate, timing of elections to defer, forms of distribution
of Shares and the like as the Board shall determine.
8. Assignability. Each Option granted under this Plan shall be transferable
only by will or by the laws of the descent and distribution and shall be
exercisable, during an Optionee's lifetime, only by the Optionee to whom the
Option is granted. Except as permitted by the preceding sentence, no Option
granted under the Plan or any of the rights and privileges thereby conferred
shall be transferred, assigned, pledged, or hypothecated in any way (whether by
operation of law or otherwise), and no such Option, right, or privilege shall be
subject to execution, attachment, or similar process. Upon any attempt so to
transfer, assign, pledge, hypothecate, or otherwise dispose of the Option or any
right or privilege conferred thereby, contrary to the provisions hereof, or upon
the levy of any attachment or similar process upon such Option, right, or
privilege, the Option and such rights and privileges shall immediately become
null and void.
9. Effect of Death or Disability. (a) Notwithstanding anything in this Plan
to the contrary, in the event an Optionee's services with the Company or any
subsidiary of the Company in a capacity described in Section 3(a) hereof shall
be terminated by reason of the Optionee's death or disability, all Options held
by such Optionee which have not been theretofore exercised or otherwise expired
shall be immediately exercisable in full, notwithstanding subsection 7(b) or (c)
hereof.
(b) Upon the death or disability of an Optionee, any Option or Options
granted to him under this Plan which have not previously expired or been
exercised shall be exercisable by the estate of the Optionee (or by any person
who acquired such Option by bequest or inheritance from the Optionee) in full,
notwithstanding Section 7(b) or (c) hereof, any time within one year after the
death of the Optionee. References herein to the Optionee shall be deemed to
include any person entitled to exercise the Option after the death of the
Optionee under the terms of this Section 9(b) . The term "disability" shall, for
the purposes of this Plan, be defined in the same manner as such term is defined
in Section 105(d)(4) of the Code.
10. Listing and Registration of Shares. Each Option shall be subject to the
requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration, or qualification of the Share
covered thereby upon any securities exchange or any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such Option
or the issue or purchase of Shares thereunder, such Option may not be exercised
in whole or in part unless and until such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee. The Company shall not be required to issue or
deliver any certificate for Shares of its stock purchased upon the exercise of
any part of an Option before (i) the admission of such Shares to listing on any
stock exchange in which the stock of the Company may then be listed, (ii)
completion of any registration or other qualification of such Shares under any
state or federal law or ruling or regulation of any governmental regulatory body
that the Committee shall, in its sole discretion, determine is necessary or
advisable, and (iii) the Committee shall have been advised by counsel that all
applicable legal requirements have been complied with and satisfied.
11. Expiration and Termination of the Plan. Options may be granted under
the Plan at any time or from time to time so long as the total number of Shares
at any one
time optioned and/or purchased under this Plan does not exceed 388,002 Shares.
The Plan may be abandoned or terminated at any time by the Board except with
respect to any Options then outstanding under the Plan. No Option shall be
granted pursuant to the Plan after ten years from effective date of the Plan.
12. Amendment of Plan. The Board may at any time and from time to time
modify and amend the Plan (including the form of any option agreement to be
executed pursuant hereto) in any respect: provided, however, that no such
amendment shall: (a) increase (except in accordance with Section 6 hereof) the
maximum number of Shares for such Options may be granted under the Plan either
in the aggregate or to any individual; (b) reduce (except in accordance with
Section 6 hereof) the minimum option prices which may be established under the
Plan; (c) extend the period or periods during which Options may be granted or
exercised; (d) change the provisions relating to adjustments to be made upon
changes in capitalization. The termination or any modification or amendment of
the Plan shall not, without the consent of the Optionee, affect such Optionee's
rights under an Option theretofore granted to him.
13. Applicability of Plan to Outstanding Stock Options. This Plan shall not
affect the terms and conditions of any non-qualified stock options heretofore
granted to any individual by the Company (or any of its predecessors), under any
other plan or agreement relating to non-qualified stock options, nor shall it
affect any of the rights of any individual to whom such a non-qualified stock
option was granted, except to the extent in either event that the individual
Optionee consents to the application of this Plan to his or her options, in
which case such options shall be considered Option granted under this Plan.
14. Effective Date of Plan. This Plan shall become effective upon adoption
by the Board, subject to approval by the shareholders of the Company (or any of
its predecessors). This Plan shall not become effective unless such shareholder
approval shall be obtained within twelve months before or after the adoption of
the Plan by the Board.
15. Change in Control. In the event of a "change in control of the Company,
any option granted hereunder shall be deemed to be fully vested and immediately
exercisable, entitling the Optionee to immediately exercise the Option in full
and to purchase, prior to the effective date of any "change in control", the
full number of Shares subject to such option which he or she otherwise would
have been entitled to purchase during the remaining term of such option. The
Committee shall give each Optionee at least thirty (3) days prior written notice
of any event giving rise to an immediate purchase right under this Section 15.
For purposes of this Section 15, the phrase "change-in-control means (1) any
"person" (as defined in Sections 13(d) and 14 (d) of the Securities Exchange Act
of 1934 (the "Exchange Act") becoming the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing twenty percent (20%) or more of the Company's outstanding
securities having the right to vote at the election of directors, or (ii) during
any period of two (2) consecutive years, a change in the majority of the Board
of Directors unless the election of each new Director was approved by at least
two-thirds of the Directors then still in office who are Directors at the
beginning of such two (2) year period ", or (iii) a merger, consolidation or
sale of all or substantially all of the assets of the Company in which the
Company is not the surviving institution, or (iv) the distribution of a proxy
statement soliciting proxies from shareholders of the Company by someone other
than the current management of the company, seeking shareholder approval of a
plan of reorganization, merger or
consolidation of, the Company or similar transaction with one or more
corporations as result of which the outstanding shares of the class of
securities then subject to the plan of reorganization are exchanged for or
converted into cash or property or securities not issued by the Company, or (v)
a tender offer is made for twenty percent (20%) or more of the voting securities
of the Company.
* Amended by the Board of Directors on November 18, 1997
* Amended by the Board of Directors on August 19, 1997
* Amended by the Board of Directors on February 23, 1995.
* Amended By Board of Directors' Compensation Committee as of January 25,
1994.
* Amended By Shareholders as of December 16, 1993.
* Amended By Board of Directors as of November 15, 1994.