STATE OF SOUTH CAROLINA
COUNTY OF SPARTANBURG
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (hereinafter referred to as this
"Agreement") is made and entered into as of this 31th day of December, 1998,
between FIRST SOUTH BANK, A SOUTH CAROLINA corporation (hereinafter referred to
as the "Corporation"), and Xxxxx X. Slider, a resident of Spartanburg County,
South Carolina (hereinafter referred to as the "Optionee").
WHEREAS, the Board of Directors of the Corporation (hereinafter
referred to as the "Board") has adopted the First South Bank Stock Option Plan
(hereinafter referred to as the "Plan") subject to approval by the Corporation's
shareholders; and
WHEREAS, the Plan provides that a committee (hereinafter referred to as
the "Committee") of the Board will make available to certain officers and key
employees of the Corporation the right to purchase shares of the Corporation's
common stock (hereinafter referred to as "Common Stock"); and
WHEREAS, the Committee has determined that the Optionee should be
granted an option to purchase shares of Common Stock under the Plan;
NOW, THEREFORE, the Corporation and the Optionee agree as follows:
1. Date of Grant of Option. The date of grant of the option granted under this
Agreement is the 31st day of December, 1998.
2. Grant of Option. Pursuant to the Plan, the Corporation grants to the
Optionee the right (hereinafter referred to as the "Option") to purchase
from the Corporation all or any part (subject to limitations set forth in
the Plan) of an aggregate of one thousand nine hundred one (1,901) shares
of Common Stock (hereinafter referred to as the "Option Shares") which
shall be authorized but unissued shares.
3. Vesting.
(a) Periodic Vesting. Subject to subparagraph 3(b) below, the Options
shall vest and become nonforfeitable in accordance with the following
schedule:
On the Date of grant: 0% Vested
On or after the first anniversary of the date of grant: 20% Vested
On or after the second anniversary of the date of grant: 20% Vested
On or after the third anniversary of the date of grant: 20% Vested
On or after the fourth anniversary of the date of grant: 20% Vested
On or after the fifth anniversary of the date of grant: 20% Vested
(b) Accelerated Vesting. Notwithstanding paragraph (a) above, all Options
previously not vested and subject to forfeiture shall vest and shall
become nonforfeitable upon the occurrence of any of the following:
(i) Disability of Optionee. The termination of the Optionee's
employment by the Corporation by reason of disability. As set
forth in the Plan, the term "disability" is defined in the
same manner as such term is defined in Section 22(e) (3) of
the Internal Revenue Code of 1986, as amended.
(ii)Death of Optionee. The Optionee's death.
4. Option Price. The price to be paid for the Option Shares shall be sixteen
and 50/100 Dollars ($16.50) per share (hereinafter referred to as the
"Option Price") which is the fair market value of the Option Shares as
determined by the Committee as of the date of grant of this Option.
5. Method of Exercise. The Option shall be exercised by written notice to the
Committee signed by the Optionee or by such other person as may be entitled
to exercise the Option. In the exercise of the Option, the aggregate Option
Price for the shares being purchased may be paid either in cash or check
payable to the Corporation or any combination thereof and the notice of
exercise shall specify how payment will be made. The written notice shall
state the number of shares with respect to which the 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 from the date of such notice) by which the payment of the
aggregate Option Price will be made. The Optionee shall not exercise the
Option to purchase less than one hundred (100) shares, unless the committee
otherwise approves or unless the partial exercise is for the remaining
Option Shares available under the Option. A certificate or certificates for
the Option Shares of Common Stock purchased by the exercise of the Option
shall be issued in the regular course of business subsequent to the
exercise of the Option and the payment therefor. During the Option Period,
no person entitled to exercise the Option granted under this Agreement
shall have any of the rights or privileges of a shareholder with respect to
any shares of Common Stock issuable upon exercise of the 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 Corporation for such shares.
6. Termination of Option. The Option shall terminate as follows:
(a) Except as provided in subparagraphs (b), (c) and (d) below, the Option
granted under this Agreement, to the extent that it has vested and not
been exercised or expired, shall terminate on the earlier of (i) the
date that the Optionee is discharged for cause, (ii) three months
after the date the Optionee gives notice that the Optionee terminates
his or her employment with the Corporation for a reason other than
retirement or disability or (iii) the date which is ten (10) years
from the date of grant of the Option set forth in paragraph 1 hereof.
The phrase "discharged for cause" shall include termination at the
sole discretion of the Board of Directors of the Corporation because
of the Optionee's personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar
offenses) or final cease and desist order, or material breach of any
provision of any employment agreement that the optionee may have with
the Corporation.
(b) In the event the Optionee retires prior to the date which is ten (10)
years after the date of grant of the Option, the Optionee shall have
the right to exercise the Option, to the extent that it has not been
exercised by the Optionee or expired, notwithstanding any limitation
placed on the exercise of the Option by the Plan or by this Agreement,
immediately in full and at any time within three (3) months after the
date of retirement, but in no event may the Option be exercised later
than ten (10) years after the date of grant of the Option set forth in
paragraph 1 hereof. For purposes of this Agreement, the term
"retirement" shall mean (i) termination of the Optionee's employment
under conditions which would constitute retirement under any tax
qualified retirement plan maintained by the Corporation or (ii)
attaining age 65.
(c) In the event the Optionee becomes disabled prior to the date which is
ten (10) years after the date of grant of the Option, the Optionee
shall have the right to exercise the Option, to the extent that it has
not been exercised by the Optionee or expired, notwithstanding any
limitation placed on the exercise of the Option by the Plan or by this
Agreement, immediately in full and at any time within twelve (12)
months after the last date on which the Optionee provided services as
an officer or an employee of the Corporation before being disabled,
but in no event may the Option be exercised later than ten (10 years
after the date of grant of the Option set forth in paragraph 1 hereof.
For purposes of this Agreement, the term "disability" shall be defined
in the same manner as such term is defined in Section 22(e) (3) of the
Internal Revenue Code of 1986, as amended.
(d) In the event the Optionee should die while employed by the Corporation
or within three (3) months after retirement but prior to the date
which is ten (10) years after the date of grant of the Option, the
Option, to the extent it has not been exercised by the Optionee or
expired, shall be exercisable, according to its terms, by the personal
representative, the executor or administrator of the Optionee's
estate, or any person or persons who acquired the Option by bequest or
inheritance from the Optionee, notwithstanding any limitation placed
on the exercise of the Option by the Plan or by this Agreement,
immediately in full and at any time within twelve (12) months after
the date of death of the Optionee, but in no event may the Option be
exercised later than ten (10) years from the date of grant of the
Option as set forth in paragraph 1 hereof.
7. Effect of Agreement on Employment Status of Optionee. The fact that the
committee has granted the Option to the Optionee under this Agreement shall
not confer on the Optionee any right to employment with the Corporation or
to a position as an officer or an employee of the Corporation, nor shall it
limit the right of the Corporation to remove the Optionee from any position
held by the Optionee or to terminate his or her employment at any time.
8. Listing and Registration of Option Shares
(a) The Corporation's obligation to issue shares of Common Stock upon
exercise of the Option is expressly conditioned upon (i) the
completion by the Corporation of any registration or other
qualification of such shares under any state or federal law or
regulations or rulings of any government regulatory body or (ii) the
making of such investment representations or other representations and
agreements by the Optionee or any person entitled to exercise the
Option in order to comply with the requirements of any exemption from
any such registration or other qualification of the Option Shares
which the committee shall, in its sole discretion, deem necessary or
advisable. Notwithstanding the foregoing, the Corporation shall be
under no obligation to register or qualify the Option Shares under any
state or federal law. The required representations and agreements
referenced above may include representations and agreements that the
Optionee, or any other person entitled to exercise the Option, (i) is
purchasing such shares on his or her own behalf as an investment and
not with a present intention of distribution or re-sale and (ii)
agrees to have placed upon any certificates representing the Option
Shares a legend setting forth any representations and agreements which
have been given to the Committee or a reference thereto and stating
that such shares may not be transferred except in accordance with all
applicable state and federal securities laws and regulations, and
further representing that, prior to making any sale or other
disposition of the Option Shares, the Optionee, or any other person
entitled to exercise the Option, will give the Corporation notice of
the intention to sell or dispose of such shares not less than five (5)
days prior to such sale or disposition.
9. Adjustment Upon Change 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 the Optionee's
rights under this Agreement, equitable proportionate adjustments shall
be made by the Committee in the number, kind, and the Option Price of
shares subject to the unexercised portion of the Option granted under
this Agreement. The adjustments to be made shall be determined by the
Committee and shall be consistent with such change or changes in the
Corporation's total number of outstanding shares; provided, however,
that no adjustment shall change the aggregate Option Price for the
exercise of the Option granted under this Agreement.
(b) The grant of the Option under this Agreement shall not affect in any
way the right or power of the Corporation or its shareholders to make
or authorize any adjustment, recapitalization, reorganization, or
other change in the Corporation's capital structure or its business,
or any merger or consolidation of the Corporation, or to issue bonds,
debentures, preferred or other preference stock ahead of or affecting
Common Stock or the right thereof, or the dissolution or liquidation
of the Corporation, or any sale or transfer of all or any part of the
Corporation's assets or business.
(c) Upon the effective date of the dissolution or liquidation of the
Corporation, the Option granted under this Agreement shall terminate.
10. Nontransferability. The Option granted under this Agreement shall not be
assignable or transferable except, in the event of the death of the
Optionee, by will or by the laws of descent and distribution. In the event
of the death of the Optionee, the personal representative, the executor or
the administrator of the Optionee's estate, or the person or persons who
acquired by bequest or inheritance the right to exercise the Option may
exercise the unexercised Option or a portion thereof, in accordance with
the terms hereof, prior to the date which is ten (10) years after the date
of grant of Option as set forth in paragraph 1 hereof.
11. Notices. Any notice or other communications required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have
been sufficiently given when delivered personally or when deposited in the
United States mail as Certified Mail, return receipt requested, properly
addressed with postage prepaid, if to the Corporation at its principal
office at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000; and, if
to the Optionee to his or her last address appearing on the books of the
Corporation. The Corporation and the Optionee may change their address or
addresses by giving written notice of such change as provided herein. Any
notice or other communication hereunder shall be deemed to have been given
on the date actually delivered or as of the third (3rd) business day
following the date mailed, as the case may be.
12. Construction Controlled by Plan. This Agreement shall be construed so as to
be consistent with the Plan; and the provisions of the Plan shall be deemed
to be controlling in the event at any provision hereof should appear to be
inconsistent therewith. The Optionee hereby acknowledges receipt of a copy
of the Plan from the Corporation.
13. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be valid and enforceable under
applicable law, but if any provision of this Agreement is determined to be
unenforceable, invalid or illegal, the validity of any other provision or
part thereof, shall not be affected thereby and this Agreement shall
continue to be binding on the parties hereto as if such unenforceable,
invalid or illegal provision or part thereof had not been included herein.
14. Modification of Agreement; Waiver. This Agreement may be modified, amended,
suspended, or terminated, and any terms, representations or conditions may
be waived, but only by written instrument signed by each of the parties
hereto. No waiver hereunder shall constitute a waiver with respect to any
subsequent occurrence or other transaction hereunder or of any other
provision hereof.
15. Captions and Headings; Gender and Number. Captions and paragraph headings
used herein are for convenience only, do not modify or affect the meaning
of any provision herein, are not a part hereof, and shall not serve as a
basis for interpretation or in construction of this Agreement. As used
herein, the masculine gender shall include the feminine and neuter, the
singular number the plural, and vice versa, whenever such meanings are
appropriate.
16. Governing Law; Venue and Jurisdiction. Without regard to the principles of
conflicts of laws, the laws of the State of South Carolina shall govern and
control the validity, interpretation, performance, and enforcement of this
Agreement. The parties hereto agree that any suit or action relating to
this Agreement shall be instituted and prosecuted in the courts of the
County of Spartanburg, State of South Carolina, and each party hereby does
waive any right or defense relating to such jurisdiction and venue.
17. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the Corporation, its successors and assigns, and shall be
binding upon and inure to the benefit of the Optionee, his heirs, legatees,
personal representatives, executors, and administrators.
18. Entire Agreement. This Agreement constitutes and embodies the entire
understanding and agreement of the parties hereto and, except as otherwise
provided hereunder, there are no other agreements or understandings,
written or oral, in effect between the parties hereto relating to the
matters addressed herein.
19. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed an original, but
all of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Corporation, has caused this instrument to be
executed in its corporate name by its President, or one of its Vice Presidents,
and attested by its Secretary or one of its Assistant Secretaries, and its
corporate seal to be hereto affixed, all by authority of its Board of Directors
first duly given, and the Optionee has hereunto set his or her hand and adopted
as his or her seal the typewritten work "SEAL" appearing beside his or her name,
all done this the day and year first above written.
FIRST SOUTH BANK
By:----------------------------------------
Xxxxx X. X. Xxxxxxxxxxxxxx, Chairman
ATTEST:
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V. Xxxxx Xxxxxx, Corporate Secretary
[CORPORATE SEAL]
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Xxxxx X. Slider, Optionee
EXHIBIT A
NOTICE OF EXERCISE OF
INCENTIVE STOCK OPTION
To: The Stock Option Committee of the Board of Directors of First South Bank
The undersigned hereby elects to purchase _____________whole
shares of Common Stock of First South Bank (the "Corporation") pursuant to the
Incentive Stock Option granted to the undersigned in that certain Incentive
Stock Option Agreement between the Corporation and the undersigned dated the
____day of ____________,________. The aggregate purchase price for such shares
is $_________, which amount is (i) being tendered herewith, (ii) will be
tendered on or before _______________________,199___ (cross out provision which
does not apply) in cash and/or check payable to the Corporation. The effective
date of this election shall be ________________,199___, or the date of receipt
of this Notice by the Corporation if later.
Executed this _________day of __________________, 199___,
at_____________________________________________________________________.
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(Social Security Number)
