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1998 Management Recognition Plan

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Sectors: Banking
Governing Law: North Carolina, View North Carolina State Laws
Effective Date: January 01, 1998
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BOC FINANCIAL CORP.
1998 MANAGEMENT RECOGNITION PLAN


BOC Financial Corp., a North Carolina corporation (the "Corporation"), does herein set forth the terms of the BOC Financial Corp. 1998 Management Recognition Plan, (this "Plan") which was adopted by the Board of Directors (the "Board") of the Corporation on ________, 1998 and approved by the shareholders of the Corporation on __________, 1998 (the "Effective Date").


1. Purpose of this Plan


The purpose of this Plan is to provide to certain directors, officers and employees of the Corporation and its subsidiaries (collectively "Participants" or singularly, "Participant") an ownership interest in the Corporation, in consideration of their contributions to the growth and profitability of the Corporation by making awards (collectively "Awards" or singularly, "Award") of shares of common stock of the Corporation (the "Common Stock"). The Board believes that participation in the ownership of the Corporation will induce Participants to continue to serve the Corporation as directors, officers and employees and encourage them to contribute to the future growth and profitability of the Corporation.


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 shall decide to whom Awards shall be made under this Plan, the number of shares of Common Stock subject to each Award, the number of additional shares, if any, to be purchased or allocated for the purposes of this Plan, and such additional terms and conditions for Awards as the Board shall deem appropriate, including, without limitation, any determinations as to the restrictions or conditions on transfer of shares of Common Stock that are necessary or appropriate to satisfy all applicable securities laws, rules, regulations, and listing requirements.


(c) The Board may designate any officers or employees of the Corporation 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.


(d) Any shares of Common Stock held under this Plan shall be held by ________ and ________ (hereinafter referred to as the "Trustees") and any successor or successors who from time to time may be appointed by the Board.


3. Shares of Common Stock Available Under the Plan


(a) The Corporation shall provide funding to the Plan to purchase _____________________ (______) shares of the Common Stock of the Corporation (the "Initial Plan Shares"). Such shares shall be held or delivered by the Trustees pursuant to the terms of this Plan.


(b) Upon purchase of the Initial Plan Shares as provided in subparagraph (a) above, ___________________________ (______) of such shares (the "Allocated Initial Plan Shares") shall be allocated as provided in paragraph 5 hereof. If shares once allocated to a Participant are forfeited as provided in paragraph 6 hereof, then such forfeited shares shall be retained by the Trustees and they shall again be available for making additional Awards to Participants as provided in paragraph 2 hereof.


(c) At any time, and from time to time, the Corporation may purchase additional shares of Common Stock for making Awards under this Plan. Such shares shall be held by the Trustees pursuant to the terms of this Plan and shall be available for making additional Awards to Participants as provided in paragraph 2 hereof.


(d) The shares referred to in (i) the last sentence of subparagraph (b) above, (ii) subparagraph (c) above and (iii) the last sentence of this subparagraph (d) shall be treated collectively as a pool of shares available (the "Available Shares") for making additional Awards to Participants as provided in paragraph 2 hereof. With respect to the Available Shares, if any such shares once allocated to a Participant are forfeited as provided in paragraph 6 hereof, then such forfeited shares shall be retained by the Trustees and they shall be available again for grants to Participants as provided in paragraph 2 hereof.


4. Eligibility. The Participants in this Plan to whom Awards may be made shall be the following: such directors, officers and employees of the Corporation and its subsidiaries as may be designated by the Board.


5. Award of Allocated Initial Plan Shares; Additional Awards


(a) Subject to the provisions of paragraph 7 hereof, all of the Allocated Initial Plan Shares shall be awarded to certain directors, officers and employees of the Corporation and its subsidiaries (the "Initial Participants") in the number indicated in a resolution or resolutions duly adopted by the Board.


(b) The Available Shares shall be held by the Trustees under this Plan and shall be available for the making of additional Awards to Participants during the remaining term of this Plan, upon such terms and conditions as may be determined by the Board.


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6. Vesting of Shares


(a) Shares granted under this Plan shall vest and the right of a Participant to the shares shall be nonforfeitable in accordance with the following schedules:


(i) With respect to the Allocated Initial Plan Shares awarded as of
the Effective Date:


Date When Such Shares Percentage of Such
Become Vested Shares Vested
------------- -------------
Effective Date of Plan 0%
First Anniversary of Effective Date 20%
Second Anniversary of Effective Date 20%
Third Anniversary of Effective Date 20%
Fourth Anniversary of Effective Date 20%
Fifth Anniversary of Effective Date 20%


(ii) With respect to the Available Shares which may be made subject to
an Award after the Effective Date:


Date When Such Shares Percentage of Such
Become Vested Shares Vested
------------- -------------
Date of Award 0%
First Anniversary of the date of Award 20%
Second Anniversary of the date of Award 20%
Third Anniversary of the date of Award 20%
Fourth Anniversary of the date of Award 20%
Fifth Anniversary of the date of Award 20%


(b) In determining the number of shares vested under the above vesting schedules, a Participant shall not receive fractional shares. If the product resulting from multiplying the vested percentage times the allocated shares results in a fractional share, then a Participant's vested right shall be to the whole number of shares disregarding any fractional share.


(c) In the event any Participant to whom shares are awarded under this Plan terminates employment or service as a director, officer or employee with the Corporation for any reason, other than as provided in subparagraph 6(d) below, and such Participant does not have a 100% vested interest in the Participant's shares under this Plan, then any shares which are not vested, based upon the applicable schedule in subparagraph (a) above, shall be forfeited and shall be available again for Awards to Participants as may be determined by the Board.


(d) In the event that the employment or service as a director, officer or employee of a Participant with the Corporation should terminate because of such Participant's


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disability, death or as a result of a "change in control" of the Corporation (as such term is defined below) prior to the date when all shares allocated to the Participant would be 100% vested in accordance with the applicable schedule in subparagraph 6(a) above, then, notwithstanding the foregoing schedules in subparagraph 6(a) above, all shares allocated to such Participant shall immediately become fully vested and nonforfeitable. For purposes of this Plan, 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. When used herein, 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 (25%) percent of the Corporation'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 Corporation with one or more other corporations in which the Corporation is not the surviving corporation, or the transfer of all or substantially all of the assets or shares of the Corporation to another person or entity.


7. Action Required of Participants


(a) Each Participant receiving an Award of shares under this Plan shall represent to and agree with the Corporation and the Trustees that the Participant (i) is acquiring such shares on the Participant's behalf as an investment and not with a present intention of distribution or re-sale and (ii) agrees to have placed upon the certificates representing such shares a legend setting forth these representations and agreements or a reference thereto. Such shares shall be transferable thereafter only if the proposed transfer shall be permissible under this Plan and if, in the opinion of counsel for the Corporation, such transfer shall at such time be in compliance with all applicable federal and state securities laws and regulations.


(b) Each Participant receiving an Award of shares under this Plan shall deliver to the Corporation a Restricted Stock Agreement, substantially in the form attached hereto as Exhibit A, which shall be signed by such Participant.


8. Restriction


(a) Shares subject to an Award made under this Plan shall forthwith, after the making of the representations required by paragraph 7 hereof, be issued and a certificate or certificates for such shares shall be prepared in the name of such Participant. Such Participant shall thereupon be a shareholder with respect to all the shares represented by such certificate or certificates and shall have all the rights of a shareholder with respect to all such shares, including the right to vote such shares and to receive all dividends and other distributions (subject to the provisions of subparagraph 8(b) below) paid with respect to such shares; provided, however, that such shares shall be subject to the restrictions hereinafter described and to possible forfeiture as previously described in paragraph 6 hereof. Certificates of stock representing shares subject to an Award made under this Plan shall be imprinted with a legend to the effect that the shares represented are subject to restrictions on transfer and potential forfeiture in accordance with the terms of the Restricted Stock Agreement, and the transfer agent for Common Stock shall be


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instructed to that effect with respect to such shares. In aid of such restrictions, the Participant shall, immediately upon receipt of the certificate or certificates, deposit such certificate or certificates together with a stock power or other instrument of transfer, appropriately endorsed in blank, with the Trustees or with such other escrow agent as may be designated by the Trustees, with the expenses of any such escrow arrangement to be borne by the Corporation.


(b) In the event that, as the result of a stock split or stock dividend or combination of shares or any other change or exchange for other securities by reclassification, reorganization, merger, consolidation, recapitalization, or otherwise, a Participant shall, as the owner of the shares subject to an Award made under this Plan and subject to the restrictions hereunder, be entitled to new or additional or different shares of Common Stock or other securities, the certificate or certificates for, or other evidence of, such new or additional or different shares or other securities, together with a stock power or other instrument of transfer appropriately endorsed, shall also be imprinted with a legend as provided in subparagraph 8(a) above and deposited by such Participant with the Trustees, and all provisions of this Plan relating to vesting, restrictions, and lapse of restrictions herein set forth shall thereupon be applicable to such new or additional or different shares or other securities to the extent applicable to the shares with respect to which they were distributed; provided, however, that if a Participant should receive rights, warrants, or fractional interests in respect of any of such shares then being held under the terms of this Plan, such rights or warrants may be held, exercised, sold, or otherwise disposed of, and such fractional interests may be settled, by such Participant free and clear of the restrictions herein set forth.


(c) The restriction to which shares subject to an Award made under this Plan shall be subject is that if the directorship or employment of a Participant should be terminated for any reason during the "restricted period" (as defined in subparagraph 12(b) hereof), except as otherwise specifically provided in paragraph 6 hereof, the Participant's interest in the shares issued under this Plan shall be forfeited as provided in the applicable schedule in subparagraph 6(a) hereof.


(d) The restrictions imposed on shares issued under this Plan may at any time be modified, reduced, relaxed, or eliminated altogether as the Board shall from time to time determine, if, in its discretion, the Board considers such action to be in furtherance of the purposes of this Plan. Notice of any change in restrictions shall be given to Participants, the Trustees and the Corporation's transfer agent.


9. Effect of Award on Status of Participant. The fact that an Award is made to a Participant under this Plan shall not confer on such Participant any right to continued employment with the Corporation or any subsidiary of the Corporation or service on its Board of Directors; nor shall it limit the right of the Corporation to terminate the Participant's employment with the Corporation or service on the Board of Directors at any time.


10. Voting Rights; Dividends; Other Distributions. A Participant shall have the full power to vote all of the shares held by the Trustees in the Participant's name from time to time and shall be entitled to receive all cash dividends declared upon any such shares held by the


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Trustees in the Participant's name from time to time. All shares of Common Stock or other securities, including but not limited to stock dividends, issued in respect of such shares or in substitution thereof, whether by the Corporation or by another issuer, shall be held by the Trustees and shall be subject to all terms and conditions of this Plan and shall be redelivered to a Participant or delivered as instructed by the Board under the same circumstances as the shares with respect to, or in substitution for, which they were issued; provided, however, that if a Participant should receive rights, warrants, or fractional interests in respect of any of the shares held by the Trustees in the Participant's name, such rights or warrants may be held, exercised, sold, or otherwise disposed of, and such fractional interests may be se
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