Exhibit 4.6
CARDINAL
STATE BANK
2001 NONSTATUTORY STOCK OPTION PLAN
(As Amended and Restated May 26, 2005)
Cardinal State
Bank, a North Carolina banking corporation (hereinafter referred to
as the “Bank”), does herein set forth the terms of the
Cardinal State Bank 2001 Nonstatutory Stock Option Plan
(hereinafter referred to as this “Plan”), which was
adopted by the Board of Directors (hereinafter referred to as the
“Board”) of the Bank subject to shareholder and
regulatory approval as provided in paragraph 21 hereof.
1.
Purpose of
this Plan .
The purpose of this
Plan is to provide for the grant of Nonstatutory Stock Options
(hereinafter referred to as “Options” or singularly,
“Option”) to Eligible Directors (as hereinafter
defined) of the Bank who wish to invest in the Bank’s common
stock (hereinafter referred to as “Common
Stock”). The Board believes that participation in the
ownership of the Bank by the Eligible Directors will be to the
mutual benefit of the Bank and the Eligible Directors. In
addition, the existence of this Plan will make it possible for the
Bank to attract capable individuals to serve on the Board. As
used herein, the term “Eligible Directors” or
singularly, “Eligible Director,” shall mean members of
the Board of Directors of the Bank serving at the time of adoption
of this Plan or who may serve thereon from time to time.
2.
Administration of this
Plan.
(a)
This Plan shall be
administered by the Board. The Board shall have full power
and authority to construe, interpret and administer this
Plan. All actions, decisions, determinations, or
interpretations of the Board shall be final, conclusive, and
binding upon all parties.
(b)
The Board may designate any
officers or employees of the Bank or of any of its subsidiaries to
assist in the administration of this Plan. The Board may
authorize such individuals to execute documents on its behalf and
may delegate to them such other ministerial and limited
discretionary duties as the Board may see fit.
3.
Shares of
Common Stock Subject to this Plan . The maximum number of shares of
Common Stock that shall be offered under this Plan is two hundred
twenty six thousand one hundred twenty (226,120) shares, subject to
adjustment as provided in paragraph 14. Shares subject to
Options which expire or terminate prior to the issuance of the
shares of Common Stock shall lapse and the shares of Common Stock
originally subject to such Options shall again be available for
future grants of Options under this Plan.
4.
Eligibility;
Grant of Options .
Each Eligible Director
serving on the Board shall receive an Option to purchase shares of
Common Stock in the amount as shall be determined by the Board of
Directors by a majority vote. Any Options not granted hereby
may be reserved for future issuance by a majority vote of the
entire Board.
5.
Vesting of
Options .
Options granted under
this Plan shall become vested as follows:
i.
Fifty percent (50%) upon date
of grant;
ii.
Twenty-five percent (25%) upon
first anniversary of date of grant; and
iii.
Twenty-five percent (25%) upon
second anniversary of date of grant.
6.
Option
Price .
(a)
The price per share of each
Option granted under this Plan (hereinafter called the
“Option Price”) shall be determined by the Board as of
the effective date of grant of such Option, but in no event shall
such Option Price be less than 100% of the fair market value of
Common Stock on the date of grant. An Option shall be
considered as granted on the later of (i) the date that the
Board acts to grant such Option, or (ii) such later date as
the Board shall specify in an Option Agreement (as hereinafter
defined).
1
(b)
The fair market value of a
share of Common Stock shall be determined as follows:
(i) if on the date as of which such determination is being
made, Common Stock being valued is admitted to trading on a
securities exchange or exchanges for which actual sale prices are
regularly reported, or actual sale prices are otherwise regularly
published, the fair market value of a share of Common Stock shall
be deemed to be equal to the mean of the closing sale price as
reported for each of the five (5) trading days
immediately preceding the date as of which such determination is
made; provided , however , that, if a closing sale
price is not reported for each of the five (5) trading
days immediately preceding the date as of which such determination
is made, then the fair market value shall be equal to the mean of
the closing sale prices on those trading days for which such price
is available, or (ii) if on the date as of which such
determination is made, no such closing sale prices are reported,
but quotations for Common Stock being valued are regularly listed
on the National Association of Securities Dealers Automated
Quotation System or another comparable system, the fair market
value of a share of Common Stock shall be deemed to be equal to the
mean of the average of the closing bid and asked prices for such
Common Stock quoted on such system on each of the
five (5) trading days preceding the date as of which such
determination is made, but if a closing bid and asked price is not
available for each of the five (5) trading days, then the
fair market value shall be equal to the mean of the average of the
closing bid and asked prices on those trading days during the
five-day period for which such prices are available, or
(iii) if no such quotations are available, the fair market
value of a share of Common Stock shall be deemed to be the average
of the closing bid and asked prices furnished by a professional
securities dealer making a market in such shares, as selected by
the Board, for the trading date first preceding the date as of
which such determination is made. If the Board determines
that the price as determined above does not represent the fair
market value of a share of Common Stock, the Board may then
consider such other factors as it deems appropriate and then fix
the fair market value for the purposes of this Plan.
7.
Payment of
Option Price .
Payment for shares
subject to an Option may only be made in cash.
8.
Terms and
Conditions of Grant of Options . Each Option granted pursuant to
this Plan shall be evidenced by a written Nonstatutory Stock Option
Agreement (hereinafter referred to as “Option
Agreement”) with each Eligible Director (hereinafter referred
to as “Optionee”) to whom an Option is granted; such
agreement shall be substantially in the form attached hereto as
“Exhibit A,” unless the Board shall adopt a
different form and, in each case, may contain such other,
different, or additional terms and conditions as the Board may
determine. The Option shall terminate as provided in paragraph 12
hereof. Furthermore, Options granted pursuant to this Plan
shall be subject to the right of the North Carolina Commissioner of
Banks (the “Commissioner”) and the Federal Deposit
Insurance Corporation (“FDIC”) to direct the Bank to
require an Optionee to exercise or forfeit his or her stock rights
if the Bank’s capital falls below the minimum requirements,
as determined by the Commissioner or FDIC.
9.
Option
Period . Each Option Agreement shall set
forth a period during which such Option may be exercised
(hereinafter referred to as the “Option Period”);
provided , however , that the Option Period shall not
exceed ten (10) years after the date of grant of such Option
as specified in an Option Agreement.
10.
Limitation on
Grant of Stock Options . No one individual shall be granted Options
under this Plan in excess of 40% of the shares reserved for
issuance pursuant to Paragraph 3 hereof.
11.
Exercise of
Options .
An Option shall be
exercised by written notice to the Board signed by an Optionee or
by such other person as may be entitled to exercise such
Option. In the case of the exercise of an Option, the
aggregate Option Price for the shares being purchased may only be
paid in cash and must be accompanied by a notice of exercise.
The written notice shall state the number of shares with respect to
which an Option is being exercised and shall either be accompanied
by the payment of the aggregate Option Price for such shares or
shall fix a date (not more than ten (10) business days
after the date of such notice) by which the payment of the
aggregate Option Price will be made. An Optionee shall not
exercise an Option to purchase less than 100 shares, unless
the Board otherwise approves or unless the partial exercise is for
the remaining shares available under such Option. A
certificate or certificates for the shares of Common Stock
purchased by the exercise of an Option shall be issued in the
regular course of business subsequent to the exercise of such
Option and the payment therefor. During the Option Period, no
person entitled to exercise any Option granted under this Plan
shall have any of the rights or privileges of a shareholder with
respect to any shares of Common Stock issuable upon exercise of
such Option, until certificates representing such shares shall have
been issued and delivered and the individual’s name entered
as a shareholder of record on the books of the Bank for such
shares.
2
12.
Effect of
Leaving the Board .
(a)
In the event that an Optionee
leaves the Board for any reason other than retirement, disability,
death, or following a “change in control” of the Bank
(as defined in paragraph 12(e)) any Option granted to the Optionee
under this Plan, to the extent not previously exercised by the
Optionee or expired, and notwithstanding that any Options have
vested hereunder, shall immediately terminate and shall be
available again for the granting of additional options to Eligible
Directors during the remaining term of this Plan upon such terms
and conditions as may be determined by the Board.
(b)
In the event that an Optionee
should leave the Board as a result of such Optionee’s
retirement, all Options granted such Optionee shall vest and such
Optionee shall have the right to exercise any Options granted under
this Plan, to the extent that it has not previously been exercised
by the Optionee or expired, for such period of time as may be
determined by the Board and specified in an Option Agreement, but
in no event may any Option be exercised later than the end of the
Option Period provided in the Option Agreement in accordance with
paragraph 9 hereof. For purposes of this Plan, the term
“retirement” shall mean termination of an Eligible
Director’s membership on the Board (i) at any time after
attaining age 65 with the approval of the Board; or (ii) at
the election of the Eligible Director, at any time after not less
than five (5) years service as a member of the Board, such
service shall be computed cumulatively for purposes of this clause
(ii).
(c)
In the event that an Optionee
should leave the Board by reason of such Optionee’s
disability, all Options granted such Optionee shall vest and such
Optionee shall have the right to exercise any Options granted under
this Plan, to the extent that it has not previously been exercised
or expired, for such period of time as may be determined by the
Board and specified in an Option Agreement, but in no event may any
Option be exercised later than the end of the Option Period
provided in the Option Agreement in accordance with
paragraph 9 hereof. For purposes of this Plan, the term
“disability” shall be defined as may be determined by
the Board, from time to time, or as determined at any time with
respect to any individual Optionee.
(d)
In the event that an Optionee
should die while serving on the Board or after leaving by reason of
disability or retirement or following a “change in
control” during the Option Period provided in an Option
Agreement in accordance with paragraph 9 hereof, an Option
granted under this Plan, to the extent that it has not previously
been exercised or expired, shall vest and be exercisable, in
accordance with its terms, by the personal representative of such
Optionee, the executor or administrator of such Optionee’s
estate, or by any person or persons who acquired such Option by
bequest or inheritance from such Optionee, notwithstanding any
limitations placed on the exercise of such Option by this Plan or
an Option Agreement, at any time within twelve (12) months after
the date of death of such Optionee, but in no event may an Option
be exercised later than the end of the Option Period provided in an
Option Agreement in accordance with paragraph 9 hereof.
Any references herein to an Optionee shall be deemed to include any
person entitled to exercise an Option after the death of such
Optionee under the terms of this Plan.
(e)
In the event an Optionee shall
leave the Board as a result of a “change in control” of
the Bank, all Options granted such Optionee shall vest and the
Optionee shall have the right to exercise any Options granted under
this Plan, to the extent that they have not previously been
exercised by the Optionee or expired, for such period of time as
may be determined by the Board as specified in an Option Agreement,
but in no event may any Options be exercised later than the end of
the Option Period provided in the Option Agreement in accordance
with paragraph 9 hereof. For purposes of this Plan, the
phrase “change in control” refers to (i) the
acquisition by any person, group of persons or entity of the
beneficial ownership or power to vote more than twenty-five percent
(25%) of the Bank’s outstanding stock, (ii) during any
period of two (2) consecutive years, a change in the majority
of the Board unless the election of each new Director was approved
by at least two-thirds of the Directors then still in office who
were Directors at the beginning of such two (2) year period,
or (iii) a reorganization, merger, or consolidation of the
Bank with one or more other entities in which the Bank is not the
surviving entity, or the transfer of all or substantially all of
the assets or shares of the Bank to another person or entity.
Notwithstanding anything else herein, for purposes of this Plan the
term “change in control” shall not include a
transaction approved by the Board which results in the Bank merging
with, transferring its assets to or becoming the subsidiary of a
corporation newly formed at the direction of the Board for the
purpose of such transaction or serving as a bank holding company
for the Bank, and in connection with which transaction the
Bank’s shareholders (other than those who exercise statutory
rights of dissent and appraisal) become the holders of
substantially all of the voting stock of
3
such corporation.
Further, notwithstanding anything else herein, a transaction or
event shall not be considered a change in control if, prior to the
consummation or occurrence of such transaction or event, the
Optionee and the Bank agree in writing that the same shall not be
treated as a change in control for purposes of this
Plan.
13.
Effect of
Plan on Status as Member of a Board . The fact that an Eligible Director
has been granted an Option under this Plan shall not confer on such
Eligible Director any right to continued service on the Board, nor
shall it limit the right of the Bank to remove such Eligible
Director from the Board at any time.
14.
Adjustment
Upon Changes in Capitalization; Dissolution or Liquidation
.
(a)
In the event of a change in
the number of shares of Common Stock outstanding by reason of a
stock dividend, stock split, recapitalization, reorganization,
merger, exchange of shares, or other similar capital adjustment
prior to the termination of an Optionee’s rights under this
Plan, equitable proportionate adjustments shall be made by the
Board in (i) the number and kind of shares which remain
available under this Plan, and (ii) the number, kind, and the
Option Price of shares subject to the unexercised portion of an
Option under this Plan. The adjustments to be made shall be
determined by the Board and shall be consistent with such change or
changes in the Bank’s total number of outstanding shares;
provided , however , that no adjustment shall change
the aggregate Option Price for the exercise of Options granted
under this Plan.
(b)
The grant of Options under
this Plan shall not affect in any way the right or power of the
Bank or its shareholders to make or authorize any adjustment,
recapitalization, reorganization, or other change in the
Bank’s capital structure or its business, or any merger or
consolidation of the Bank, or to issue bonds, debentures, preferred
or other preference stock ahead of or affecting Common Stock or the
rights thereof, or the dissolution or liquidation of the Bank, or
any sale or transfer of all or any part of the Bank’s assets
or business.
(c)
Except upon a “change in
control”, upon the effective date of the dissolution or
liquidation of the Bank, this Plan and any Options granted
hereunder, shall terminate.
15.
Non-Transferability
. An Option granted under this Plan
shall not be assignable or transferable except, in the event of the
death of an Optionee, by will or by the laws of descent and
distribution. In the event of the death of an Optionee, his
personal representative, the executor or the administrator of such
Optionee’s estate, or the person or persons who acquired by
bequest or inheritance the rights to exercise such Options, may
exercise any Option or portion thereof to the extent not previously
exercisable or surrendered by an Optionee or expired, in accordance
with its terms, prior to the expiration of the exercise period as
specified in subparagraph 12(d) hereof.
16.
Tax
Withholding .
The Bank or any of its
subsidiaries shall have the right to deduct or otherwise effect a
withholding of any amount required by federal or state laws to be
withheld with respect to the grant, exercise or the sale of stock
acquired upon the exercise of an Option in order for the Bank or
any of its subsidiaries to obtain a tax deduction otherwise
available as a consequence of such grant, exercise or sale, as the
case may be.
17.
Listing and
Registration of Option Shares . Any Option granted under this Plan
shall be subject to the requirement that if at any time the Board
shall determine, in its discretion, that the listing, registration,
or qualification of the shares covered thereby upon any securities
exchange or under 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 issuance 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 Board.
18.
Exculpation
and Indemnification .
In connection with this
Plan, no member of the Board shall be personally liable for any act
or omission to act in such person’s capacity as a member of
the Board, nor for any mistake in judgment made in good faith,
unless arising out of, or resulting from, such person’s own
bad faith, gross negligence, willful misconduct, or criminal
acts. To the extent permitted by applicable law and
regulation, the Bank shall indemnify and hold harmless the members
of the Board, and each other officer or employee of the Bank or of
any of its subsidiaries to whom any duty or power relating to the
administration or interpretation of this Plan may be assigned or
delegated, from and against any and all liabilities (including any
amount paid in settlement of a claim with the approval of the
Board) and any costs or expenses (including counsel fees) incurred
by such persons arising
4
out of or as a result
of, any act or omission to act in connectio
|
