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