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EXHIBIT 10.13
SOUTHERN COMMUNITY FINANCIAL CORPORATION
2002 EMPLOYEE STOCK PURCHASE PLAN
1. DEFINITIONS. In this Plan, except where the context
otherwise
indicates, the following definitions
apply:
1.1. "Account" means a bookkeeping account established and
maintained hereunder by the Administrator
or its designee in the name of each
Participant. The term "Account" shall not
include a Brokerage Account.
1.2. "Administrator" means the Compensation Committee of the
Board of the Corporation.
1.3. "Affiliate" means a parent or subsidiary corporation of
the Corporation, as defined in Code
Sections 424(e) and (f) (but substituting
"the Corporation" for "employer
corporation"), including parents or subsidiaries
of the Corporation that become such after
adoption of the Plan.
1.4. "Board" means the Board of Directors of the Corporation.
1.5. "Brokerage Account" means an account established and
maintained by a broker-dealer or financial
institution in the name of each
Participant to which shall be transferred
Shares purchased hereunder on behalf
of such Participant. In addition, the
Administrator may transfer cash to a
Participant's Brokerage Account in the
event a cash refund is owed to such
Participant under any provision of the
Plan.
1.6. "Business Day" means any day other than a Saturday,
Sunday or legal holiday in Winston Salem,
North Carolina, except as otherwise
determined by the Administrator.
1.7. "Code" means the Internal Revenue Code of 1986, as
amended.
1.8. "Common Stock" means the common stock of the Corporation.
1.9. "Compensation" means base cash compensation received by
an Employee from the Corporation or its
Designated Affiliate. By way of
illustration, but not limitation,
Compensation includes regular compensation
such as salary and commissions, but
excludes overtime, bonuses, relocation
payments or reimbursements, expense
reimbursements, tuition or other
reimbursements, automobile allowances,
housing allowances, cash payments in lieu
of sick or vacation time benefits and
income realized as a result of
participation in any stock option, stock
purchase, or similar plan of the
Corporation or its Designated
Affiliate.
1.10. "Corporation" means Southern Community Financial
Corporation, a North Carolina corporation,
and any successor thereto.
1.11. "Designated Affiliate" means any Affiliate that has
been designated by the Board or the
Administrator as eligible to participate in
the Plan.
1.12. "Employee" means any person, including an Officer, who
is customarily employed for at least twenty
(20) hours per week and more than
five (5) months in a calendar year by the
Corporation or one of its Designated
Subsidiaries. The status of an individual
as an Employee shall not be affected
by a leave of absence from employment with
the Corporation or a Designated
Affiliate, as the case may be, provided
that such leave is for a period of not
more than 90 days or reemployment upon the
expiration of such leave is
guaranteed by contract, policy, or
statute.
1.13. "Enrollment Form" means the form prescribed by the
Administrator (or its designee) that shall
be (a) completed and executed by an
Employee (through written, telephonic, or
electronic means, or through other
means of communication) who elects to
participate in the Plan, and (b) filed
(through written, telephonic, or electronic
means, or through other means of
communication) with the Administrator (or
its designee).
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1.14. "Exercise Date" means May 31 of each Plan Year and/or
such other date(s) as may be specified by
the Administrator; provided, however,
that, if any Exercise Date shall not be a
Business Day in any Plan Year, then
for purposes of that Plan Year such
Exercise Date shall be the first Business
Day following such Exercise Date.
1.15. "Fair Market Value" means, unless otherwise determined
by the Administrator, an amount equal to
the regular closing price (not taking
into account extended trading sessions) for
a Share on a given date on the
NASDAQ National Market System, or, if such
price is not reported, the mean of
the bid and asked prices per share of the
Common Stock as reported by NASDAQ or,
in the event the Common Stock is listed on
a stock exchange, the Fair Market
Value per share shall be the closing sales
price on such exchange on such date
(or, in the event that the Common Stock is
not traded on such date, on the
immediately preceding trading date), as
reported in The Wall Street Journal. If
such price quotations of the Common Stock
are not then reported, then the fair
market value of a Share, as determined by
the Administrator, pursuant to a
reasonable method adopted in good faith for
such purpose.
1.16. "Notice" means a notice provided by an Employee to the
Administrator (or its designee) in such
form (which may be written, telephonic,
electronic, or other means of
communication) as may be specified by the
Administrator (or its designee).
1.17. "Offering Date" means June 1 of each Plan Year and/or
such other date(s) as may be specified by
the Administrator; provided, however,
that, if any Offering Date shall not be a
Business Day in any Plan Year, then
for purposes of that Plan Year such
Offering Date shall be the first Business
Day following such Offering Date.
1.18. "Option" means an option granted pursuant to Section 8.
1.19. "Option Period" means the period beginning on an
Offering Date and ending on the next
succeeding Exercise Date.
1.20. "Option Price" means the purchase price of shares of
Common Stock hereunder as provided in
Section 9 hereof.
1.21. "Participant" means any Employee who (a) is eligible to
participate in the Plan under Section 5
hereof, and (b) elects with respect to
an Option Period to participate in this
Plan pursuant to Section 5 hereof.
1.22. "Plan" means the Southern Community Financial
Corporation Employee Stock Purchase Plan,
as amended from time to time.
1.23. "Plan Year" means the 12-month period beginning June 1
of each calendar year and ending on the
next following May 31.
1.24. "Share" means a share of Common Stock.
2. PURPOSE The purpose of this Plan is to provide Employees of
the
Corporation and its Designated Affiliates
with an opportunity to purchase shares
of Common Stock of the Corporation and
thereby to encourage Employee
participation in the ownership and economic
success of the Corporation. It is
the Corporation's intention that this Plan
qualify as an employee stock purchase
plan under Code Section 423 and be
construed in a manner consistent with the
requirements thereof.
3. ADMINISTRATION OF PLAN
3.1.
The Administrator shall administer the Plan. Subject to
the provisions of the Plan, the
Administrator shall have complete authority and
power to:
(a) construe
and interpret the Plan and any Enrollment
Form or Notice;
(b) prescribe,
adopt, amend and rescind rules and
regulations not inconsistent with the Plan or Code
Section 423 relating to, and, in the Administrator's
discretion, deemed desirable and appropriate for, the
administration of the Plan, including, but not
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limited to, (i) determining whether, when and to what
extent to credit Accounts with interest, (ii)
determining the time and manner in which to refund
amounts credited to a Participant's Account upon such
Participant's withdrawal from, or termination of
eligibility to participate in, the Plan, (iii)
specifying Offering Dates and Exercise Dates,
including special
Offering Dates for Employees who do
not satisfy the Plan's service requirements on or
before a regular Offering Date, to the extent
permitted by Treasury Regulation Section
1.423-2(f)(4), (iv) specifying the duration of any
Option Period, provided, however, that in no event
may the duration of any Option Period exceed one
year, and (v) specifying Option Prices; and
(c) make all
other determinations deemed necessary or
advisable for the administration of the Plan.
3.2. The interpretations, determinations and decisions of the
Administrator in respect of the Plan shall
be final, binding and conclusive.
3.3. Notwithstanding any other provision of the Plan, the
Administrator shall have the authority to
appoint any other person (or persons)
or entity (or entities) to manage the Plan
(or specified aspects thereof) and to
delegate to them such authority with
respect to the administration of the Plan
as the Administrator, in its sole
discretion, deems advisable from time to time.
4. EFFECTIVE DATE; TERM OF PLAN
4.1. The Plan shall become effective as of June 1, 2003. For
purposes of qualifying the Plan under Code
Section 423, the Plan shall be
submitted for approval by the Corporation's
stockholders at the Corporation's
2003 annual meeting of stockholders.
4.2. Unless sooner terminated pursuant to Section 16 or 23
hereof, the Plan shall terminate on January
20, 2013. Upon any termination of
the Plan, the amount, if any, credited to
each Participant's Account, including
interest, if any, shall be refunded, in the
manner prescribed by the
Administrator, to each such Participant or,
in cases where such a refund may not
be possible, otherwise disposed of in
accordance with policies and procedures
prescribed by the Administrator.
5. ELIGIBILITY
Any Employee shall be eligible to participate in the Plan as of
the
first Offering Date occurring at least 90
days after becoming an Employee. An
eligible Employee may become a Participant
as of such Offering Date or as of any
subsequent Offering Date by executing and
filing an Enrollment Form with the
Administrator (or its designee) on or
before the date prescribed by the
Administrator (or its designee).
Notwithstanding any other provision of this
Plan, no Employee may participate in the
Plan if, immediately after an Offering
Date, such Employee would be deemed for
purposes of Code Section 423(b)(3) to
possess five percent (5%) or more of the
total combined voting power or value of
all classes of stock of the Corporation or
any Affiliate.
6. PAYROLL DEDUCTIONS
6.1. Payment by a Participant for Shares to be purchased by
the Participant under the Plan shall be
made by authorized after-tax payroll
deductions from the portion of Compensation
paid to the Participant on each
payday during an Option Period of a whole
percentage, from one percent to twenty
percent (or such other maximum percentage
as the Administrator may establish
from time to time before an Offering Date),
of such Compensation in accordance
with the Enrollment Form executed by the
Participant.
6.2. Payroll deductions for each Option Period shall commence
on the first payday following the Offering
Date for the applicable Option Period
and shall end on the last payday prior to
the Exercise Date of the applicable
Option Period.
6.3. All amounts deducted from a Participant's Compensation
pursuant to this Section 6 shall be
credited to such Participant's Account. A
Participant may not make any payments or
contributions to his Account other than
payroll deductions pursuant to the
provisions of this Section 6.
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6.4. A Participant may increase or decrease the percentage of
his or her payroll deductions on one
occasion only during any Option Period by
completing and filing with the Corporation
a new Enrollment Form authorizing a
change in the payroll deduction rate. Any
change in rate of contributions
pursuant to the preceding sentence shall be
effective as of the beginning of the
next calendar month following the date of
filing of the new subscription
agreement, provided the agreement
indicating such change is filed at least ten
(10) business days prior to such date and,
if not, then as of the beginning of
the next succeeding calendar month. A
Participant may discontinue payroll
deductions during any Option Period. If a
Participant elects to discontinue
payroll deductions during any Option Period
pursuant to this Section 6.4, the
Participant shall withdraw from the Plan in
accordance with Section 19 hereof.
6.5. If a Participant does not withdraw from the Plan during
an Option Period and elects to continue,
his or her Enrollment Form shall remain
effective for subsequent Option Periods. If
a Participant does not elect to have
his or her Enrollment Form remain effective
for subsequent Option Periods, he or
she must complete a new Enrollment Form for
the any such subsequent Option
Period in order to participate in the Plan
during any such subsequent Option
Period.
6.6. Notwithstanding any election to the contrary under
Section 6.5 hereof, a Participant may
increase or decrease the percentage of his
payroll deductions for any subsequent
Option Period by executing and filing a
new Enrollment Form with the Administrator
(or its designee) on or before the
date prescribed by the Administrator (or
its designee).
6.7. Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the
Code, a Participant's payroll deductions
may be decreased by the Corporation to 0%
at any time during an Option Period.
Payroll deductions shall re-commence at the
rate provided in such Participant's
subscription agreement at the beginning of
the subsequent Option Period, unless
terminated by the participant as provided
in Section 19.
7. INTEREST CREDITS
The Administrator may, but shall not be obligated to, credit
each
Participant's Account with interest, at
such rate and at such times as shall be
determined by the Administrator.
8. GRANT OF OPTION
Subject to the provisions of the Plan, on the Offering Date for
each
Option Period, each Participant shall be
granted an Option to purchase the
largest number of whole Shares that can be
purchased with the Participant's
projected Account balance as of the
Exercise Date for such Option Period. The
number of whole Shares purchased during an
Option Period shall be determined by
(a) dividing the Participant's Account
balance as of such Exercise Date by the
Option Price per Share, and (b) rounding
the number obtained in clause (a) down
to the nearest whole number.
9. OPTION PRICE
The Option Price per Share purchased by a Participant pursuant to
the
exercise of an Option shall be eighty five
percent (85%) of Fair Market Value of
a Share on the Offering Date, or such other
amount as may be specified by the
Administrator, but in no event shall the
Option Price per Share be less than the
lesser of (i) 85% of the Fair Market Value
of a Share on the Offering Date of
the Option, or (ii) 85% of the Fair Market
Value of a Share on the Exercise Date
of the Option.
10. PURCHASE OF SHARES
Subject to the provisions of the Plan, on the Exercise Date for
each
Option Period, the Option granted to each
Participant under Section 8 hereof on
the Offering Date for such Option Period
shall be exercised automatically, and
the largest number of whole Shares subject
to such Option shall be purchased by
the Participant by charging the
Participant
