UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _________ to _________
Commission file number 333-83851
South Carolina 58-2459561
--------------------- ----------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1805 Laurens Road
Greenville, S.C. 29607
---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
|
Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES X NO
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:
1,150,000 shares of common stock, $.01 par value per share, issued and outstanding as of May 5, 2000.
GREENVILLE FIRST BANCSHARES, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The financial statements of Greenville First Bancshares, Inc. (the "Company") are set forth in the following pages.
GREENVILLE FIRST BANCSHARES, INC
BALANCE SHEETS
March 31, 2000 December 31, 1999
(Unaudited) (Development Stage
Enterprise)
Assets (Audited)
Cash and due from bank $ 1,126,801 $ 5,856
Federal funds sold 7,740,000 1,460,000
Investments securities available for sale 5,469,569 8,317,872
Loans 13,059,001 -
Less reserve for loan losses (100,000) -
------------------ -----------------
12,959,001 -
----------------- -----------------
Accrued interest 104,226 246,773
Property and equipment 264,358 111,192
Other assets 82,150
----------------- -----------------
Total Assets $ 27,746,105 $ 10,141,693
================= =================
Liabilities and Stockholders' Equity
Liabilities
Deposits $ 17,486,026 $ -
Accounts payable 315,760 11,322
Accrued expense 67,568 18,000
Accrued interest expense 42,002 -
Other 1,300 -
----------------- -----------------
17,912,656 29,322
----------------- -----------------
Commitments and Contingencies
Stockholders' Equity
Preferred stock, par value $.01 per share
10,000,000 shares authorized, no shares issued
Common Stock, par value $.01 per share
10,000,000 shares authorized 1,150,000 issued
and outstanding at March 31, 2000 and
December 31, 1999. 11,500 11,500
Additional paid-in capital 10,635,200 10,635,200
Retained deficit (808,448) (534,329)
Accumulated other comprehensive loss (4,803) -
------------------ -----------------
Total stockholders' equity 9,833,449 10,112,371
----------------- -----------------
Total liabilities and stockholders' equity $ 27,746,105 $ 10,141,693
================= =================
See Notes to Consolidated Financial Statements which are an integral part of
these statements.
|
GREENVILLE FIRST BANCSHARES, INC.
STATEMENT OF OPERATIONS
Three Months Ended March 31, 2000
(Unaudited)
Interest income
Investments $ 191,658
Loans 144,299
-------------------
Total interest income 335,957
Interest expense 116,533
-------------------
Net interest income 219,424
Provision for loan loss 100,000
Other income 2,362
General & administrative expenses
Salaries and benefits 245,156
Professional fees 25,120
Marketing 2,164
Outside services 15,998
Occupancy 71,006
Telephone 5,961
Other 30,500
-------------------
Total general & administrative expenses 395,905
-------------------
Net loss before taxes 274,119
Provision for income taxes -
-------------------
Net loss $ 274,119
==================
Basic loss per share .24
Weighted average shares outstanding $ 1,150,000
|
See Notes to Consolidated Financial Statements which are in integral part of these statements.
GREENVILLE FIRST BANCSHARES, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the three months ended March 31, 2000
(Unaudited)
Accumulated
Common Stock Other Total
---------- Additional Retained Comprehensive Shareholders
Shares Amount Paid-in Capital Deficit Loss Equity
------- ------ --------------- ------- ---- ------
Balance at December 31, 1999 1,150,000 $11,500 $10,635,200 $ (534,329) $ - $ 10,112,371
Comprehensive loss, net of tax:
Net loss (274,119) (274,119)
Unrealized loss on investments
Held for sale (4,803) (4,803)
----------- ---------- --------------- ------------- ----------------- ----------------
Total comprehensive loss (274,119) (4,803) (278,922)
----------- ---------- --------------- ------------- ----------------- ----------------
Balance at March 31, 2000 1,150,000 $11,500 $10,635,200 $ (808,448) $ (4,803) $ 9,833,449
=========== ========== ============== ============= ================= ================
|
See Notes to Consolidated Financial Statements which are an integral part of these statements.
GREENVILLE FIRST BANCSHARES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
For the three months ended March 31, 2000
(Unaudited)
Operating activities
Net loss $ (274,119)
Adjustments to reconcile net loss to cash provide by operating activities:
Provision for loan losses 100,000
Depreciation and other amortization 15,497
Accretion and amortization of securities discounts and premium, net (1,705)
Other assets, net 60,397
Other liabilities, net 397,308
-------------------
Net cash provided by operating activities 297,378
-------------------
Investing activities
Increase (decrease) in cash realized from:
Origination of loans, net (13,059,001)
Purchase property and equipment (168,663)
Purchase of securities available for sale (5,553,591)
Increase in federal funds sold (6,280,000)
Payments and maturity of securities available for sale 8,398,796
-------------------
Net cash used in investing activities (16,662,459)
--------------------
Financing activities
Increase in deposits, net 17,486,026
------------------
Net increase in cash 1,120,945
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,856
-------------------
5,856
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,126,801
====================
|
See Notes to Consolidated Financial Statements which are in integral part of these statements.
GREENVILLE FIRST BANCSHARES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Nature of Business and Basis of Presentation
Business activity and organization
Greenville First Bancshares, Inc. (the "Company") is a South Carolina corporation organized for the purpose of owning and controlling all of the capital stock of Greenville First Bank (the "Bank"). The Bank is a national bank organized under the laws of the United States located in Greenville County, South Carolina. The company received approval from both the FDIC and the OCC on January 7, 2000. The Bank began operations on January 10, 2000.
Since inception through January 10, 2000, the Company has engaged in organizational and pre-opening activities necessary to obtain regulatory approvals and to prepare its subsidiary, the Bank, to commence business as a financial institution. On January 10, 2000, the Bank opened for business. The Bank is primarily engaged in the business of accepting demand deposits and savings insured by the Federal Deposit Insurance Corporation, and providing commercial, consumer and mortgage loans to the general public.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Registration Statement on Form SB-2 (Registration Number 333-83851) as filed with and declared effective by the Securities and Exchange Commission.
Until the Bank opened for business on January 10, 2000, the Company was accounted for as a development stage enterprise as defined by Statement of Financial Accounting Standards No. 7, "Accounting and Reporting by Development Stage Enterprises," as the Company devoted substantially all of its efforts to establishing a new business. When the Bank opened, certain reclassifications and adjustments were made to the financial statements to reflect that the Company is now accounted for as an operating company.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation.
The following discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These statements appear in a number of places in this report and include all statements that are not statements of historical fact regarding our intent, belief, or expectations. These forward-looking statements are not guarantees of future performance and actual results may differ materially from those projected in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, our brief operating history, our ability to manage rapid growth, general economic conditions, competition, interest rate sensitivity, and exposure to regulatory and legislative changes. Additional risks are discussed in detail in our filings with the Securities and Exchange Commission, including the "Risk Factors" section in our Registration Statement on Form SB-2 (Registration Number 333-83851) as filed with and declared effective by the Securities and Exchange Commission.
Until January 10, 2000, the Company's principal activities related to its organization, the conducting of its initial public offering, the pursuit of approvals from the OCC for its application to charter the Bank, and the pursuit of approvals from the FDIC for its application for insurance of the deposits of the Bank. The company received approval from both the FDIC and the OCC on January 7, 2000. The Bank opened for business on January 10, 2000.
The Company completed its stock offering on November 30, 1999, upon the issuance of 1,150,000 shares for a total of $11,500,000. The Company capitalized the Bank with $ 8,500,000 of the proceeds from the stock offering. The Company does not currently anticipate raising additional capital.
At March 31, 2000, the Company had total assets of $27.7 million, consisting principally of $13.0 million in loans, $13.2 million in investments and $1.4 million in cash and due from bank. Liabilities at March 31, 2000 totaled $17.9 million, consisting principally of $17.5 million in deposits and $316,000 in accounts payable. At March 31, 2000, shareholders' equity was $9.8 million.
The Company incurred a net loss of $274,119 for the three months ended March 31, 2000. The Bank began operations on January 10, 2000. Prior to this date, the Company's activities consisted principally of obtaining the required regulatory approvals, hiring the appropriate personnel and implementing operating procedures. Most of these activities were complete in 1999, and the substantial portion of the loss resulted from the Bank's first quarter of operations. Included in the $274,119 of loss is a non-cash expense of $100,000 related to the provision for loan loss. The Bank realized $335,957 in interest income of which $191,658 was from investment activities and $144,299 was from loan activities. The higher level of investment income resulted from the Bank's high level of liquidity in the first quarter as the Bank began to originate loans. In the first quarter of 2000 the Bank's loan originations were $13.1 million. At March 31, 2000 the Bank had net loans of $13.0 million and investments of $13.2 million. The Bank plans to continue to decrease its investment portfolio and to increase its loan portfolio. The primary source of funding for the Bank's loan portfolio is the maturity of investment securities and deposits that are acquired.
At March 31, 2000 the Bank's loan portfolio consisted primarily of $5.9 million of commercial real estate loans, $2.8 million of commercial business loans, and $3.8 million of consumer and home equity loans. At March 31, 2000, there were no non-performing loans. The Bank incurred interest expense of $116,553 in the first quarter of 2000. All of the interest expense was related to deposit accounts. At March 31, 2000 the Bank had $17.5 million in deposits. The $17.5 million in deposits consisted primarily of $4.9 million in personal checking, $2.4 million in business checking, $2.9 million in certificates of deposit and $7.1 million of money market accounts of which 69% is business accounts.
The Bank incurred general and administrative expenses of $395,905. Included in the expense is $245,156 of salaries and benefits, $71,006 of occupancy expenses and $25,120 of professional expense that consisted primary of audit fees and attorney fees. The bank incurred $15,998 of expenses related to outside services, which was primarily for data processing services. The bank incurred only $2,164 in marketing expense as a result of both loan and deposit volumes exceeding our expectations and not needing to advertise in the first quarter. The primarily expense in other expense relates to the various office supplies that were required to start the Bank.
Year 2000 Readiness
Like many financial institutions, we rely upon computers for conducting our business and for information systems processing. Industry experts were concerned that on January 1, 2000, some computers would not be able to interpret the new year properly, causing computer malfunctions. Because we commenced operations on January 10, 2000, we had the ability to choose vendors that we believed to be ready for the Year 2000. While we have not experienced any material computer malfunctions to date, there remains a risk that our computers will be unable to read or interpret data on Year 2000-sensitive dates, including October 10, 2000. Our regulators have issued guidelines to require compliance with Year 2000 issues. In accordance with these guidelines, we have developed and executed a plan to ensure that our computer and telecommunication systems do not have these Year 2000 problems. We believe that our internal systems and software, including our network connections, are programmed to comply with Year 2000 requirements, although there is a risk they may not be. Under our plan, we are continuing to monitor the situation throughout 2000. Based on information currently available, we believe that we will not incur significant additional expenses in connection with the Year 2000 issue.
The Year 2000 issue may also negatively affect the business of our customers, but to date we are not aware of any material Year 2000 issues affecting them. We include Year 2000 readiness in our lending criteria to minimize risk. However, this will not eliminate the issue, and any financial difficulties that our customers experience caused by Year 2000 issues could impair their ability to repay loans to us.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which the Company is a party or of which any of their property is the subject.
Item 2. Changes in Securities
(a) Not applicable
(b) Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
------ -----------
1.1 Form of Underwriting Agreement between Greenville First Bancshares and
Wachovia Securities (incorporated by reference to Exhibit 1.1 of the
Registration Statement on Form SB-2, File No. 333-83851).
3.1. Articles of Incorporation, as amended (incorporated by reference to
Exhibit 3.1 of the Registration Statement on Form SB-2, File No.
333-83851).
3.2. Bylaws (incorporated by reference to Exhibit 3.2 of the Registration
Statement on Form SB-2, File No. 333-83851).
4.1. See Exhibits 3.1 and 3.2 for provisions in Greenville First
Bancshares's Articles of Incorporation and Bylaws defining the rights
of holders of the common stock (incorporated by reference to Exhibit
4.1 of the Registration Statement on Form SB-2, File No. 333-83851).
4.2. Form of certificate of common stock (incorporated by reference to
Exhibit 4.2 of the Registration Statement on Form SB-2, File No.
333-83851).
|
5.1. Opinion Regarding Legality (incorporated by reference to Exhibit 5.1 of
the Registration Statement on Form SB-2, File No. 333-83851).
10.1. Employment Agreement dated July 27, 1999 between Greenville First
Bancshares and Art Seaver (incorporated by reference to Exhibit 10.1 of
the Registration Statement on Form SB-2, File No. 333-83851).
10.2. Lease Agreement between Greenville First Bank and Halton Properties,
LLC, formerly Cothran Properties, LLC (incorporated by reference to the
Company's Form 10-KSB filed on March 29, 2000).
10.3 Data Processing Services Agreement dated June 28, 1999 between
Greenville First Bancshares and the Intercept Group (incorporated by
reference to Exhibit 10.3 of the Registration Statement on Form SB-2,
File No. 333-83851).
10.4 Form of Stock Warrant Agreement (incorporated by reference to Exhibit
10.4 of the Registration Statement on Form SB-2, File No. 333-83851).
10.5 Promissory Note dated February 22, 1999 from Greenville First
Bancshares, Inc. in favor of John J. Meindl, Jr. (incorporated by
reference to Exhibit 10.5 of the Registration Statement on Form SB-2,
File No. 333-83851).
10.6 Standard Form of Agreement between Greenville First Bancshares, Inc.
and AMI Architects (incorporated by reference to the Company's Form
10-KSB filed on March 29, 2000).
10.7 *Greenville First Bancshares 2000 Stock Incentive Plan
27.1 *Financial Data Schedule (for electronic filing purposes)
|
*Filed herewith
(b) Not applicable
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GREENVILLE FIRST BANCSHARES, INC.
Date: May 15, 2000 /s/ R. Arthur Seaver, Jr.
-----------------------------------
R. Arthur Seaver, Jr.
Chief Executive Officer
Date: May 15, 2000 /s/ James M. Austin, III
-----------------------------------
James M. Austin, III
Chief Financial Officer
|
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
1.1 Form of Underwriting Agreement between Greenville First Bancshares and
Wachovia Securities (incorporated by reference to Exhibit 1.1 of the
Registration Statement on Form SB-2, File No. 333-83851).
3.1. Articles of Incorporation, as amended (incorporated by reference to
Exhibit 3.1 of the Registration Statement on Form SB-2, File No.
333-83851).
3.2. Bylaws (incorporated by reference to Exhibit 3.2 of the Registration
Statement on Form SB-2, File No. 333-83851).
4.1. See Exhibits 3.1 and 3.2 for provisions in Greenville First
Bancshares's Articles of Incorporation and Bylaws defining the rights
of holders of the common stock (incorporated by reference to Exhibit
4.1 of the Registration Statement on Form SB-2, File No. 333-83851).
4.2. Form of certificate of common stock (incorporated by reference to
Exhibit 4.2 of the Registration Statement on Form SB-2, File No.
333-83851).
5.1. Opinion Regarding Legality (incorporated by reference to Exhibit 5.1 of
the Registration Statement on Form SB-2, File No. 333-83851).
10.1. Employment Agreement dated July 27, 1999 between Greenville First
Bancshares and Art Seaver (incorporated by reference to Exhibit 10.1 of
the Registration Statement on Form SB-2, File No. 333-83851).
10.2. Lease Agreement between Greenville First Bank and Halton Properties,
LLC, formerly Cothran Properties, LLC (incorporated by reference to the
Company's Form 10-KSB filed on March 29, 2000).
10.3 Data Processing Services Agreement dated June 28, 1999 between
Greenville First Bancshares and the Intercept Group (incorporated by
reference to Exhibit 10.3 of the Registration Statement on Form SB-2,
File No. 333-83851).
10.4 Form of Stock Warrant Agreement (incorporated by reference to Exhibit
10.4 of the Registration Statement on Form SB-2, File No. 333-83851).
10.5 Promissory Note dated February 22, 1999 from Greenville First
Bancshares, Inc. in favor of John J. Meindl, Jr. (incorporated by
reference to Exhibit 10.5 of the Registration Statement on Form SB-2,
File No. 333-83851).
10.7 Standard Form of Agreement between Greenville First Bancshares, Inc.
and AMI Architects (incorporated by reference to the Company's Form
10-KSB filed on March 29, 2000).
10.7 *Greenville First Bancshares 2000 Stock Incentive Plan
27.1 *Financial Data Schedule (for electronic filing purposes)
|
*Filed herewith
GREENVILLE FIRST BANCSHARES, INC.
2000 STOCK INCENTIVE PLAN
GREENVILLE FIRST BANCSHARES, INC.
2000 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
ARTICLE I DEFINITIONS...........................................1
ARTICLE II THE PLAN 4
2.1 NAME....................................................4
----
2.2 PURPOSE.................................................4
-------
2.3 EFFECTIVE DATE..........................................4
--------------
ARTICLE III PARTICIPANTS....................................4
ARTICLE IV ADMINISTRATION.........................................4
4.1 DUTIES AND POWERS OF THE COMMITTEE......................4
----------------------------------
4.2 INTERPRETATION; RULES...................................5
---------------------
4.3 NO LIABILITY............................................5
------------
4.4 MAJORITY RULE...........................................5
-------------
4.5 COMPANY ASSISTANCE......................................5
------------------
ARTICLE V SHARES OF STOCK SUBJECT TO PLAN........................5
5.2 ANTIDILUTION............................................6
------------
ARTICLE VI OPTIONS 7
6.1 TYPES OF OPTIONS GRANTED................................7
------------------------
6.2 OPTION GRANT AND AGREEMENT..............................7
--------------------------
6.3 OPTIONEE LIMITATIONS....................................7
--------------------
6.4 $100,000 LIMITATION.....................................8
-------------------
6.5 EXERCISE PRICE..........................................8
--------------
6.6 EXERCISE PERIOD.........................................8
---------------
6.7 OPTION EXERCISE.........................................8
---------------
6.8 RELOAD OPTIONS.........................................10
--------------
6.9 NONTRANSFERABILITY OF OPTION...........................10
----------------------------
6.10 TERMINATION OF EMPLOYMENT OR SERVICE...................10
------------------------------------
6.11 EMPLOYMENT RIGHTS......................................10
-----------------
6.12 CERTAIN SUCCESSOR OPTIONS..............................10
-------------------------
6.13 EFFECT OF A CORPORATE TRANSACTION.....................11
---------------------------------
6.14 FORFEITURE BY ORDER OF REGULATORY AGENCY...............11
----------------------------------------
ARTICLE VII STOCK CERTIFICATES...................................11
ARTICLE VIII TERMINATION AND AMENDMENT...........................11
8.2 EFFECT ON GRANTEE'S RIGHTS.............................12
--------------------------
ARTICLE IX RELATIONSHIP TO OTHER COMPENSATION PLANS..............12
ARTICLE X MISCELLANEOUS..........................................12
i
|
EXHIBIT A to GREENVILLE FIRST BANCSHARES, INC.. 2000 STOCK INCENTIVE PLAN - Form of Stock Option Agreement |
GREENVILLE FIRST BANCSHARES, INC.
2000 STOCK INCENTIVE PLAN
ARTICLE I
DEFINITIONS
As used herein, the following terms have the following meanings unless the context clearly indicates to the contrary:
"Board" shall mean the Board of Directors of the Company.
"Cause" (i) with respect to the Company or any subsidiary which employs the recipient of an Option (the "recipient") or for which such recipient primarily performs services, the commission by the recipient of an act of fraud, embezzlement, theft or proven dishonesty, or any other illegal act or practice (whether or not resulting in criminal prosecution or conviction), or any act or practice which the Committee shall, in good faith, deem to have resulted in the recipient's becoming unbondable under the Company's or the subsidiary's fidelity bond; (ii) the willful engaging by the recipient in misconduct which is deemed by the Committee, in good faith, to be materially injurious to the Company or any subsidiary, monetarily or otherwise, including, but not limited, improperly disclosing trade secrets or other confidential or sensitive business information and data about the Company or any subsidiaries and competing with the Company or its subsidiaries, or soliciting employees, consultants or customers of the Company in violation of law or any employment or other agreement to which the recipient is a party; or (iii) the willful and continued failure or habitual neglect by the recipient to perform his or her duties with the Company or the subsidiary substantially in accordance with the operating and personnel policies and procedures of the Company or the subsidiary generally applicable to all their employees. For purposes of this Plan, no act or failure to act by the recipient shall be deemed be "willful" unless done or omitted to be done by recipient not in good faith and without reasonable belief that the recipient's action or omission was in the best interest of the Company and/or the subsidiary. Notwithstanding the foregoing, if the recipient has entered into an employment agreement that is binding as of the date of employment termination, and if such employment agreement defines "Cause," then the definition of "Cause" in such agreement shall apply to the recipient in this Plan. "Cause" under either (i), (ii) or (iii) shall be determined by the Committee.
"Code" shall mean the United States Internal Revenue Code of 1986, including effective date and transition rules (whether or not codified). Any reference herein to a specific section of the Code shall be deemed to include a reference to any corresponding provision of future law.
"Committee" shall mean a committee of at least two Directors appointed from time to time by the Board, having the duties and authority set forth herein in addition to any other authority granted by the Board. In selecting the Committee, the Board shall consider (i) the benefits under Section 162(m) of the Code of having a Committee composed of "outside directors" (as that term is defined in the Code) for certain grants of Options to highly compensated executives, and (ii) the benefits under Rule 16b-3 of having a Committee composed of either the entire Board or a Committee of at least two Directors who are Non-Employee Directors for Options granted to or held by any Section 16 Insider. At any time that the Board shall not have appointed a committee as described above, any reference herein to the Committee shall mean the Board.
"Company" shall mean Greenville First Bancshares, Inc., a South Carolina corporation.
"Corporate Transaction" shall mean the occurrence of any of the following events:
(i) a merger or consolidation in which securities possessing more than 50% of the total combined voting power of the Company's outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction;
(ii) the sale, transfer or other disposition of all or substantially all of the Company's assets in complete liquidation or dissolution of the Company; or
(iii) the grant of any bank regulatory approval (or notice of no disapproval) for permission to acquire control of the Company or any of its banking subsidiaries.
"Director" shall mean a member of the Board and any person who is an advisory or honorary director of the Company if such person is considered a director for the purposes of Section 16 of the Exchange Act, as determined by reference to such Section 16 and to the rules, regulations, judicial decisions, and interpretative or "no-action" positions with respect thereto of the Securities and Exchange Commission, as the same may be in effect or set forth from time to time.
"Employee" shall mean a person who constitutes an employee of the Company as such term is defined in the instructions to the Form S-8 Registration Statement under the Securities Act of 1933, and also includes non-employees to whom an offer of employment has been extended.
"Exchange Act" shall mean the Securities Exchange Act of 1934. Any reference herein to a specific section of the Exchange Act shall be deemed to include a reference to any corresponding provision of future law.
"Exercise Price" shall mean the price at which an Optionee may purchase a share of Stock under a Stock Option Agreement.
"Fair Market Value" on any date shall mean (i) the closing sales price
of the Stock, regular way, on such date on the national securities exchange
having the greatest volume of trading in the Stock during the thirty-day period
preceding the day the value is to be determined or, if such exchange was not
open for trading on such date, the next preceding date on which it was open;
(ii) if the Stock is not traded on any national securities exchange, the average
of the closing high bid and low asked prices of the Stock on the
over-the-counter market on the day such value is to be determined, or in the
absence of closing bids on such day, the closing bids on the next preceding day
on which there were bids; or (iii) if the Stock also is not traded on the
over-the-counter market, the fair market value as determined in good faith by
the Board or the Committee based on such relevant facts as may be available to
the Board, which may include opinions of independent experts, the price at which
recent sales have been made, the book value of the Stock, and the Company's
current and future earnings.
"Incentive Stock Option" shall mean an option to purchase any stock of the Company, which complies with and is subject to the terms, limitations and conditions of Section 422 of the Code and any regulations promulgated with respect thereto.
"Non-Employee Director" shall have the meaning set forth in Rule 16b-3 under the Exchange Act, as the same may be in effect from time to time, or in any successor rule thereto, and shall be determined for all purposes under the Plan according to interpretative or "no-action" positions with respect thereto issued by the Securities and Exchange Commission.
"Officer" shall mean a person who constitutes an officer of the Company for the purposes of Section 16 of the Exchange Act, as determined by reference to such Section 16 and to the rules, regulations, judicial decisions, and interpretative or "no-action" positions with respect thereto of the Securities and Exchange Commission, as the same may be in effect or set forth from time to time.
"Option" shall mean an option, whether or not an Incentive Stock Option, to purchase Stock granted pursuant to the provisions of Article VI hereof.
"Optionee" shall mean a person to whom an Option has been granted hereunder.
"Parent" shall mean any corporation (other than the Company or a Subsidiary) in an unbroken chain of corporations ending with the Company if, at the time of the grant (or modification) of the Option, each of the corporations other than the Company or a Subsidiary owns stock possessing 50% or more of the total combined voting power of the classes of stock in one of the other corporations in such chain.
"Permanent and Total Disability" shall have the same meaning as given to that term by Code Section 22(e)(3) and any regulations or rulings promulgated thereunder.
"Plan" shall mean the Greenville First Bancshares, Inc. 2000 Stock Incentive Plan, the terms of which are set forth herein.
"Purchasable" shall refer to Stock which may be purchased by an Optionee under the terms of this Plan on or after a certain date specified in the applicable Stock Option Agreement.
"Qualified Domestic Relations Order" shall have the meaning set forth in the Code or in the Employee Retirement Income Security Act of 1974, or the rules and regulations promulgated under the Code or such Act.
"Reload Option" shall have the meaning set forth in Section 6.8 hereof.
"Section 16 Insider" shall mean any person who is subject to the provisions of Section 16 of the Exchange Act, as provided in Rule 16a-2 promulgated pursuant to the Exchange Act.
"Stock" shall mean the Common Stock, par value $0.01 per share, of the Company or, in the event that the outstanding shares of Stock are hereafter changed into or exchanged for shares of a different stock or securities of the Company or some other entity, such other stock or securities.
"Stock Option Agreement" shall mean an agreement between the Company and an Optionee under which the Optionee may purchase Stock hereunder, a sample form of which is attached hereto as Exhibit A (which form may be varied by the Committee in granting an Option).
"Subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the grant (or modification) of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
ARTICLE II
THE PLAN
2.1 Name. This Plan shall be known as "Greenville First Bancshares, Inc. 2000 Stock Incentive Plan."
2.2 Purpose. The purpose of the Plan is to advance the interests of the Company, its Subsidiaries, and its shareholders by affording Employees and Directors of the Company and its Subsidiaries an opportunity to acquire or increase their proprietary interests in the Company. The objective of the issuance of the Options is to promote the growth and profitability of the Company and its Subsidiaries because the Optionees will be provided with an additional incentive to achieve the Company's objectives through participation in its success and growth and by encouraging their continued association with or service to the Company.
2.3 Effective Date. The Plan shall become effective on February __, 2000; provided, however, that if the shareholders of the Company have not approved the Plan on or prior to the first anniversary of such effective date, then all options granted under the Plan shall be non-incentive Stock Options. If, at the time of any amendment to the Plan, shareholder approval is required by the Code for Incentive Stock Options and such shareholder approval has not been obtained (or is not obtained within 12 months thereof), any Incentive Stock Options issued under the Plan shall automatically become options which do not qualify as Incentive Stock Options.
ARTICLE III
PARTICIPANTS
The class of persons eligible to participate in the Plan shall consist of all Directors and Employees of the Company or any Subsidiary.
ARTICLE IV
ADMINISTRATION
4.1 Duties and Powers of the Committee. The Plan shall be administered by the Committee. The Committee shall select one of its members as its Chairman and shall hold its meetings at such times and places as it may determine. The Committee shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it may deem necessary. The Committee shall have the power to act by unanimous written consent in lieu of a meeting, and to meet telephonically. In administering the Plan, the Committee's actions and determinations shall be binding on all interested parties. The Committee shall have the power to grant Options in accordance with the provisions of the Plan and may grant Options singly, in combination, or in tandem. Subject to the provisions of the Plan, the Committee shall have the discretion and authority to determine those individuals to whom Options will be granted and whether such Options shall be accompanied by the right to receive Reload Options, the number of shares of Stock subject to each Option, such other matters as are specified herein, and any other terms and conditions of a Stock Option Agreement. The Committee shall also have the discretion and authority to delegate to any Officer its power to grant Options under the Plan to Employees, but not to Employees who are Officers or Directors. To the extent not inconsistent with the provisions of the Plan, the Committee may give an Optionee an election to surrender an Option in exchange for the grant of a new Option, and shall have the authority to amend or modify an outstanding Stock Option Agreement, or to waive any provision thereof, provided that the Optionee consents to such action.
4.2 Interpretation; Rules. Subject to the express provisions of the Plan, the Committee also shall have complete authority to interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to it, to determine the details and provisions of each Stock Option Agreement, and to make all other determinations necessary or advisable for the administration of the Plan, including, without limitation, the amending or altering of the Plan and any Options granted hereunder as may be required to comply with or to conform to any federal, state, or local laws or regulations. If an option granted under the Plan is intended to be an Incentive Stock Option but does not qualify as an Incentive Stock Option for any reason, then the option granted shall remain valid but shall be a non-Incentive Stock Option.
4.3 No Liability. Neither any member of the Board nor any member of the Committee shall be liable to any person for any act or determination made in good faith with respect to the Plan or any Option granted hereunder.
4.4 Majority Rule. A majority of the members of the Committee shall constitute a quorum, and any action taken by a majority at a meeting at which a quorum is present, or any action taken without a meeting evidenced by a writing executed by all the members of the Committee, shall constitute the action of the Committee.
4.5 Company Assistance. The Company shall supply full and timely information to the Committee on all matters relating to eligible persons, their employment, death, retirement, disability, or other termination of employment, and such other pertinent facts as the Committee may require. The Company shall furnish the Committee with such clerical and other assistance as is necessary in the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations. The maximum number of shares that may be issued hereunder shall initially be 172,500 and thereafter shall automatically be increased each time the Company issues additional shares of Stock so that the total number of shares issuable hereunder shall at all times equal 15% of the then outstanding shares of Stock, unless in any case the Board of Directors adopts a resolution providing that the number of shares issuable under this Plan shall not be so increased. Notwithstanding the above, the total number of shares of Stock issuable pursuant to Incentive Stock Options may not be increased to more than 172,500 (other than pursuant to antidilution adjustments) without shareholder approval. In addition, the number of shares that may be issued hereunder shall be subject to any antidilution adjustment pursuant to the provisions of Section 5.2 hereof. Any or all shares of Stock subject to the Plan may be issued in any combination of Incentive Stock Options or non-Incentive Stock Options. Shares subject to an Option may be either authorized and unissued shares or shares issued and later acquired by the Company. The shares covered by any unexercised portion of an Option that has terminated for any reason (except as set forth in the following paragraph) may again be optioned under the Plan, and such shares shall not be considered as having been optioned or issued in computing the number of shares of Stock remaining available for option hereunder.
If Options are issued in respect of options to acquire stock of any entity acquired, by merger or otherwise, by the Company (or any Subsidiary of the Company), to the extent that such issuance shall not be inconsistent with the terms, limitations and conditions of Code section 422 or Rule 16b-3 under the Exchange Act, the aggregate number of shares of Stock for which Options may be granted hereunder shall automatically be increased by the number of shares subject to the Options so issued; provided, however,
that the aggregate number of shares of Stock for which Options may be granted hereunder shall automatically be decreased by the number of shares covered by any unexercised portion of an Option so issued that has terminated for any reason, and the shares subject to any such unexercised portion may not be optioned to any other person.
5.2 Antidilution.
(a) If (x) the outstanding shares of Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of merger, consolidation, reorganization, recapitalization, reclassification, combination or exchange of shares, or stock split or stock dividend, (y) any spin-off, spin-out or other distribution of assets materially affects the price of the Company's stock, or (z) there is any assumption and conversion to the Plan by the Company of an acquired company's outstanding option grants, then:
(i) the aggregate number and kind of shares of Stock for which Options may be granted hereunder shall be adjusted proportionately by the Committee; and
(ii) the rights of Optionees (concerning the number of shares subject to Options and the Exercise Price) under outstanding Options shall be adjusted proportionately by the Committee.
(b) If the Company shall be a party to any reorganization in which it does not survive, involving merger, consolidation, or acquisition of the stock or substantially all the assets of the Company, the Committee, in its sole discretion, may (but is not required to):
(i) notwithstanding other provisions hereof, declare that all Options granted under the Plan shall become exercisable immediately notwithstanding the provisions of the respective Stock Option Agreements regarding exercisability, that all such Options shall terminate 30 days after the Committee gives written notice of the immediate right to exercise all such Options and of the decision to terminate all Options not exercised within such 30-day period; and/or
(ii) notify all Optionees that all Options granted under the Plan shall be assumed by the successor corporation or substituted on an equitable basis with options issued by such successor corporation.
(c) If the Company is to be liquidated or dissolved in connection with a reorganization described in Section 5.2(b), the provisions of such Section shall apply. In all other instances, the adoption of a plan of dissolution or liquidation of the Company shall, notwithstanding other provisions hereof, cause every Option outstanding under the Plan to terminate to the extent not exercised prior to the adoption of the plan of dissolution or liquidation by the shareholders, provided that, notwithstanding other provisions hereof, the Committee may declare all Options granted under the Plan to be exercisable at any time on or before the fifth business day following such adoption notwithstanding the provisions of the respective Stock Option Agreements regarding exercisability.
(d) The adjustments described in paragraphs (a) through (c) of this Section 5.2, and the manner of their application, shall be determined solely by the Committee, and any such adjustment may provide for the elimination of fractional share interests; provided, however, that any adjustment made by the Board or the Committee shall be made in a manner that will not cause an Incentive Stock Option to be other than an Incentive Stock Option under applicable statutory and regulatory provisions.
The adjustments required under this Article V shall apply to any successors of the Company and shall be made regardless of the number or type of successive events requiring such adjustments.
ARTICLE VI
OPTIONS
6.1 Types of Options Granted. The Committee may, under this Plan, grant either Incentive Stock Options or Options which do not qualify as Incentive Stock Options. Within the limitations provided in this Plan, both types of Options may be granted to the same person at the same time, or at different times, under different terms and conditions, as long as the terms and conditions of each Option are consistent with the provisions of the Plan. Without limitation of the foregoing, Options may be granted subject to conditions based on the financial performance of the Company or any other factor the Committee deems relevant.
6.2 Option Grant and Agreement. Each Option granted hereunder shall be evidenced by minutes of a meeting or the written consent of the Committee and by a written Stock Option Agreement executed by the Company and the Optionee. The terms of the Option, including the Option's duration, time or times of exercise, exercise price, whether the Option is intended to be an Incentive Stock Option, and whether the Option is to be accompanied by the right to receive a Reload Option, shall be stated in the Stock Option Agreement. In structuring the terms of each Option, the Committee shall follow the guidelines set forth in the FDIC statement of policy relating to applications for deposit insurance, including that the terms should encourage each Optionee to remain involved in the Company and/or its Subsidiaries, such as by having a vesting period of equal percentages each year over the initial three years following the grant of the Option and a requirement that the Option be exercised or expire within a reasonable time after termination as an active officer, employee, or director. No Incentive Stock Option may be granted more than ten years after the earlier to occur of the effective date of the Plan or the date the Plan is approved by the Company's shareholders. Separate Stock Option Agreements may be used for Options intended to be Incentive Stock Options and those not so intended, but any failure to use such separate agreements shall not invalidate, or otherwise adversely affect the Optionee's interest in, the Options evidenced thereby.
6.3 Optionee Limitations. The Committee shall not grant an Incentive Stock Option to any person who, at the time the Incentive Stock Option is granted:
(a) is not an employee of the Company or any of its Subsidiaries (as the term "employee" is defined by the Code); or
(b) owns or is considered to own stock possessing at least 10%
of the total combined voting power of all classes of stock of the Company or any
of its Parent or Subsidiary corporations; provided, however, that this
limitation shall not apply if at the time an Incentive Stock Option is granted
the Exercise Price is at least 110% of the Fair Market Value of the Stock
subject to such Option and such Option by its terms would not be exercisable
after five years from the date on which the Option is granted. For the purpose
of this subsection (b), a person shall be considered to own: (i) the stock
owned, directly or indirectly, by or for his or her brothers and sisters
(whether by whole or half blood), spouse, ancestors and lineal descendants; (ii)
the stock owned, directly or indirectly, by or for a corporation, partnership,
estate, or trust in proportion to such person's stock interest, partnership
interest or beneficial interest therein; and (iii) the stock which such person
may purchase under any outstanding options of the Company or of any Parent or
Subsidiary.
6.4 $100,000 Limitation. Except as provided below, the Committee shall
not grant an Incentive Stock Option to, or modify the exercise provisions of
outstanding Incentive Stock Options held by, any person who, at the time the
Incentive Stock Option is granted (or modified), would thereby receive or hold
any Incentive Stock Options of the Company and any Parent or Subsidiary, such
that the aggregate Fair Market Value (determined as of the respective dates of
grant or modification of each option) of the stock with respect to which such
Incentive Stock Options are exercisable for the first time during any calendar
year is in excess of $100,000 (or such other limit as may be prescribed by the
Code from time to time); provided that the foregoing restriction on modification
of outstanding Incentive Stock Options shall not preclude the Committee from
modifying an outstanding Incentive Stock Option if, as a result of such
modification and with the consent of the Optionee, such Option no longer
constitutes an Incentive Stock Option; and provided that, if the $100,000
limitation (or such other limitation prescribed by the Code) described in this
Section 6.4 is exceeded, the Incentive Stock Option, the granting or
modification of which resulted in the exceeding of such limit, shall be treated
as an Incentive Stock Option up to the limitation and the excess shall be
treated as an Option not qualifying as an Incentive Stock Option.
6.5 Exercise Price. The Exercise Price of the Stock subject to each
Option shall be determined by the Committee. Subject to the provisions of
Section 6.3(b) hereof, the Exercise Price of an Option shall not be less than
the Fair Market Value of the Stock as of the date the Option is granted (or in
the case of an Incentive Stock Option that is subsequently modified, on the date
of such modification).
6.6 Exercise Period. The period for the exercise of each Option granted hereunder shall be determined by the Committee, but the Stock Option Agreement with respect to each Option shall provide that such Option shall not be exercisable after ten years from the date of grant (or modification) of the Option.
6.7 Option Exercise.
(a) Unless otherwise provided in the Stock Option Agreement or
Section 6.6 hereof, an Option may be exercised at any time or from time to time
during the term of the Option as to any or all full shares which have become
Purchasable under the provisions of the Option, but not at any time as to less
than 100 shares unless the remaining shares that have become so Purchasable are
less than 100 shares. The Committee shall have the authority to prescribe in any
Stock Option Agreement that the Option may be exercised only in accordance with
a vesting schedule during the term of the Option.
(b) An Option shall be exercised by (i) delivery to the Company at its principal office a written notice of exercise with respect to a specified number of shares of Stock and (ii) payment to the Company at that office of the full amount of the Exercise Price for such number of shares in accordance with Section 6.7(c). If requested by an Optionee, an Option may be exercised with the involvement of a stockbroker in accordance with the federal margin rules set forth in Regulation T (in which case the certificates representing the underlying shares will be delivered by the Company directly to the stockbroker).
(c) The Exercise Price is to be paid in full in cash upon the exercise of the Option and the Company shall not be required to deliver certificates for the shares purchased until such payment has been made; provided, however, that in lieu of cash, in the Company's discretion all or any portion of the Exercise Price may be paid by tendering to the Company shares of Stock duly endorsed for transfer and owned by the Optionee, or by authorization to the Company to withhold shares of
Stock otherwise issuable upon exercise of the Option, in each case to be credited against the Exercise Price at the Fair Market Value of such shares on the date of exercise (however, no fractional shares may be so transferred, and the Company shall not be obligated to make any cash payments in consideration of any excess of the aggregate Fair Market Value of shares transferred over the aggregate Exercise Price); provided further, that the Board may provide in a Stock Option Agreement (or may otherwise determine in its sole discretion at the time of exercise) that, in lieu of cash or shares, all or a portion of the Exercise Price may be paid by the Optionee's execution of a recourse note equal to the Exercise Price or relevant portion thereof, subject to compliance with applicable state and federal laws, rules and regulations. Notwithstanding the above, the Company shall not be obligated to accept tender of shares of Stock as payment of the Exercise Price if doing so would result in a charge to the Company's earnings for financial reporting purposes.
(d) In addition to and at the time of payment of the Exercise Price, the Optionee shall pay to the Company in cash the full amount of any federal, state, and local income, employment, or other withholding taxes applicable to the taxable income of such Optionee resulting from such exercise; provided, however, that in the discretion of the Committee any Stock Option Agreement may provide that all or any portion of such tax obligations, together with additional taxes not exceeding the actual additional taxes to be owed by the Optionee as a result of such exercise, may, upon the irrevocable election of the Optionee, be paid by tendering to the Company whole shares of Stock duly endorsed for transfer and owned by the Optionee, or by authorization to the Company to withhold shares of Stock otherwise issuable upon exercise of the Option, in either case in that number of shares having a Fair Market Value on the date of exercise equal to the amount of such taxes thereby being paid, and subject to such restrictions as to the approval and timing of any such election as the Committee may from time to time determine to be necessary or appropriate to satisfy the conditions of the exemption set forth in Rule 16b-3 under the Exchange Act, if such rule is applicable.
(e) The holder of an Option shall not have any of the rights of a shareholder with respect to the shares of Stock subject to the Option until such shares have been issued and transferred to the Optionee upon the exercise of the Option.
6.8 Reload Options.
(a) The Committee may specify in a Stock Option Agreement (or may otherwise determine in its sole discretion) that a Reload Option shall be granted, without further action of the Committee, (i) to an Optionee who exercises an Option (including a Reload Option) by surrendering shares of Stock in payment of amounts specified in Sections 6.7(c) or 6.7(d) hereof, (ii) for the same number of shares as are surrendered to pay such amounts, (iii) as of the date of such payment and at an Exercise Price equal to the Fair Market Value of the Stock on such date, and (iv) otherwise on the same terms and conditions as the Option whose exercise has occasioned such payment, except as provided below and subject to such other contingencies, conditions, or other terms as the Committee shall specify at the time such exercised Option is granted; provided, that the Committee may require that the shares surrendered in payment as provided above must have been held by the Optionee for at least six months prior to such surrender.
(b) Unless provided otherwise in the Stock Option Agreement, a Reload Option may not be exercised by an Optionee (i) prior to the end of a one-year period from the date that the Reload Option is granted, and (ii) unless the Optionee retains beneficial ownership of the shares of Stock issued to such Optionee upon exercise of the Option referred to above in Section 6.8(a)(i) for a period of one year from the date of such exercise.
6.9 Nontransferability of Option. Other than as provided below, no Option shall be transferable by an Optionee other than by will or the laws of descent and distribution or, in the case of non-Incentive Stock Options, pursuant to a Qualified Domestic Relations Order, and, during the lifetime of an Optionee, Options shall be exercisable only by such Optionee (or by such Optionee's guardian or legal representative, should one be appointed). However, a Non-Incentive Stock Option may, in connection with the Optionee's estate plan, be assigned in whole or in part during Optionee's lifetime to one or more members of the Optionee's immediate family or to a trust established for the exclusive benefit of one or more such family members. The assigned portion shall be exercisable only by the person or persons who acquire a proprietary interest in the Option pursuant to such assignment. The terms applicable to the assigned portion shall be the same as those in effect for this Option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Committee may deem appropriate.
6.10 Termination of Employment or Service. The Committee shall have the power to specify the effect upon an Optionee's right to exercise an Option upon termination of such Optionee's employment or service under various circumstances, which effect may include immediate or deferred termination of such Optionee's rights under an Option, or acceleration of the date at which an Option may be exercised in full. Unless a Stock Option Agreement specifically provides otherwise, in the event the recipient of an Option is terminated from his or her employment or other service to the Company or its subsidiaries for Cause, Options, whether vested or unvested, granted to such person shall terminate immediately and shall not thereafter be exercisable.
6.11 Employment Rights. Nothing in the Plan or in any Stock Option Agreement shall confer on any person any right to continue in the employ of the Company or any of its Subsidiaries, or shall interfere in any way with the right of the Company or any of its Subsidiaries to terminate such person's employment at any time.
6.12 Certain Successor Options. To the extent not inconsistent with the terms, limitations and conditions of Code section 422 and any regulations promulgated with respect thereto, an Option issued in respect of an option held by an employee to acquire stock of any entity acquired, by merger
or otherwise, by the Company (or any Subsidiary of the Company) may contain terms that differ from those stated in this Article VI, but solely to the extent necessary to preserve for any such employee the rights and benefits contained in such predecessor option, or to satisfy the requirements of Code section 424(a).
6.13 Effect of a Corporate Transaction. All Options, to the extent outstanding at the time of a Corporate Transaction but not otherwise fully exercisable, shall automatically accelerate so that the Options shall, immediately prior to the effective date of the Corporate Transaction, become exercisable for all shares at the time subject to such Options and may be exercised for any or all of those shares as fully vested shares of Stock.
6.14 Forfeiture by Order of Regulatory Agency. If the Company's or any of its financial institution Subsidiaries' capital falls below the minimum requirements contained in 12 CFR 3 or below a higher requirement as determined by the Company's or such Subsidiary's primary bank regulatory agency, such agency may direct the Company to require Optionees to exercise or forfeit some or all of their Options. All options granted under this Plan are subject to the terms of any such directive.
ARTICLE VII
STOCK CERTIFICATES
The Company shall not be required to issue or deliver any certificate for shares of Stock purchased upon the exercise of any Option granted hereunder or any portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on which the Stock is then listed;
(b) The completion of any registration or other qualification of such shares which the Committee shall deem necessary or advisable under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body;
(c) The obtaining of any approval or other clearance from any federal or state governmental agency or body which the Committee shall determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the exercise of the Option as the Board from time to time may establish for reasons of administrative convenience.
Stock certificates issued and delivered to Optionees shall bear such restrictive legends as the Company shall deem necessary or advisable pursuant to applicable federal and state securities laws. The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Stock pursuant to Options shall relieve the Company of any liability with respect to the non-issuance or sale of the Stock as to which such approval shall not have been obtained. However, the Company shall use its best efforts to obtain all such approvals.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1 Termination and Amendment. The Board may at any time terminate the Plan; provided, however, that the Board (unless its actions are approved or ratified by the shareholders of the Company within twelve months of the date that the Board amends the Plan) may not amend the Plan to:
(a) Increase the total number of shares of Stock issuable
pursuant to Incentive Stock Options under the Plan, except as contemplated in
Section 5.2 hereof; or
(b) Change the class of employees eligible to receive Incentive Stock Options that may participate in the Plan.
8.2 Effect on Optionee's Rights. No termination, amendment, or modification of the Plan shall affect adversely a Optionee's rights under a Stock Option Agreement without the consent of the Optionee or his legal representative.
ARTICLE IX
RELATIONSHIP TO OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any other stock option, incentive, or other compensation plans in effect for the Company or any of its Subsidiaries; nor shall the adoption of the Plan preclude the Company or any of its Subsidiaries from establishing any other form of incentive or other compensation plan for employees or Directors of the Company or any of its Subsidiaries.
ARTICLE X
MISCELLANEOUS
10.1 Replacement or Amended Grants. At the sole discretion of the Committee, and subject to the terms of the Plan, the Committee may modify outstanding Options or accept the surrender of outstanding Options and grant new Options in substitution for them. However no modification of an Option shall adversely affect a Optionee's rights under a Stock Option Agreement without the consent of the Optionee or his legal representative.
10.2 Forfeiture for Competition. If a Optionee provides services to a competitor of the Company or any of its Subsidiaries, whether as an employee, officer, director, independent contractor, consultant, agent, or otherwise, such services being of a nature that can reasonably be expected to involve the skills and experience used or developed by the Optionee while an Employee, then that Optionee's rights under any Options outstanding hereunder shall be forfeited and terminated subject in each case to a determination to the contrary by the Committee.
10.3 Leave of Absence. Unless provided otherwise in a particular Stock Option Agreement, the following provisions shall apply upon an Optionee's commencement of an authorized leave of absence:
(a) The exercise schedule in effect for such Option shall be frozen as of the first day of the authorized leave, and the Option shall not become exercisable for any additional installments of shares of Stock during the period Optionee remains on such leave.
(b) Should the Optionee resume active Employee status within 60 days after the start date of the authorized leave, Optionee shall, for purposes of the applicable exercise schedule, receive service credit for the entire period of such leave. If the Optionee does not resume active Employee status within such 60-day period, then no service
credit shall be given for the entire period of such leave.
(c) If the Option is an Incentive Stock Option, then the following additional provision shall apply:
If the leave of absence continues for more than three months, then the Option shall automatically convert to a Non-Incentive Stock Option under the Federal tax laws upon the expiration of such three-month period, unless the Optionee's reemployment rights are guaranteed by statute or written agreement. Following any such conversion of the Option, all subsequent exercises of the Option, whether effected before or after Optionee's return to active Employee status, shall result in an immediate taxable event, and the Company shall be required to collect from Optionee the Federal, state and local income and employment withholding taxes applicable to such exercise.
(d) In no event shall the Option become exercisable for any additional shares or otherwise remain outstanding if Optionee does not resume Employee status prior to the Expiration Date of the option term.
10.4 Plan Binding on Successors. The Plan shall be binding upon the successors and assigns of the Company.
10.5 Headings, etc., No Part of Plan. Headings of Articles and Sections hereof are inserted for convenience and reference; they do not constitute part of the Plan.
10.6 Section 16 Compliance. With respect to Section 16 Insiders, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed void to the extent permitted by law and deemed advisable by the Committee. In addition, if necessary to comply with Rule 16b-3 with respect to any grant of an Option hereunder, and in addition to any other vesting or holding period specified hereunder or in an applicable Stock Option Agreement, any Section 16 Insider acquiring an Option shall be required to hold either the Option or the underlying shares of Stock obtained upon exercise of the Option for a minimum of six months.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed as of March 21, 2000, in accordance with the authority provided by the Board of Directors.
GREENVILLE FIRST BANCSHARES, INC..
By: /s/ R. Arthur Seaver, Jr.
----------------------------------------
Name: R. Arthur Seaver, Jr.
Title: President
|
EXHIBIT A
to
GREENVILLE FIRST BANCSHARES, INC.
2000 STOCK INCENTIVE PLAN
Form of Employee of Stock Option Agreement
GREENVILLE FIRST BANCSHARES, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is entered into as of this ___ day of February, 2000, between Greenville First Bancshares, Inc., a South Carolina corporation (the "Company"), and __________ (the "Optionee").
WHEREAS, on February __, 2000, the Board of Directors of the Company adopted a Stock Incentive Plan known as the "Greenville First Bancshares, Inc. 2000 Stock Incentive Plan" (the "Stock Incentive Plan"), and recommended that the Plan be approved by the Company's shareholders; and
WHEREAS, the Committee has granted the Optionee a stock option to purchase the number of shares of the Company's common stock as set forth below, and in consideration of the granting of that stock option the Optionee intends to remain in the employ of the Company; and
WHEREAS, the Company considers it desirable and in its best interest that the Optionee be provided an inducement to acquire an ownership interest in the Company and an additional incentive to advance the interest of the Company through the grant of an option to purchase shares of common stock of the Company pursuant to the Stock Incentive Plan; and
WHEREAS, the Company and the Optionee desire to enter into a written agreement with respect to such option in accordance with the Stock Incentive Plan.
NOW, THEREFORE, as an employment incentive and to encourage stock ownership, and also in consideration of the mutual covenants contained herein, the Company and the Optionee agree as follows.
1. Incorporation of Stock Incentive Plan. This option is granted pursuant to the provisions of the Stock Incentive Plan and the terms and definitions of the Stock Incentive Plan are incorporated herein by reference and made a part hereof. A copy of the Stock Incentive Plan has been delivered to, and receipt is hereby acknowledged by, the Optionee.
2. Grant of Option. Subject to the provisions stated in this Agreement, the Company hereby evidences its grant to the Optionee, not in lieu of salary or other compensation, of the right and option (the "Option") to purchase the number of shares of the Company's Common Stock, par value $0.01 per share (the "Stock"), set forth below, exercisable in the amounts and at the time specified below. This Option is intended to be an Incentive Stock Option, as defined in the Internal Revenue Code.
Number of Shares: *****
Exercise Price: $ *** per share
Option Vesting Schedule: Options are exercisable
with respect the shares of Stock as follows,
subject in each case to continued employment
by the Company or a subsidiary of the
Company through such date, and subject to
the provisions of Section 7 of this
Agreement:
No. of Shares Vesting Date
***** _________ __, 2001
***** _________ __, 2002
***** _________ __, 2003
***** _________ __, 2004
***** _________ __, 2005
Option Exercise Period: All options expire and are void unless
exercised on or before ___________
___, 2010.
|
3. Exercise Terms. The Optionee must exercise the Option for at least the lesser of 100 shares or the number of shares of Purchasable Stock as to which the Option remains unexercised. If this Option is not exercised with respect to all or any part of the shares subject to this Option prior to its expiration, the shares with respect to which this Option was not exercised shall no longer be subject to this Option.
4. Restrictions on Transferability. No Option shall be transferable by an Optionee other than by will or the laws of descent and distribution or pursuant to a Qualified Domestic Relations Order. During the lifetime of an Optionee, Options shall be exercisable only by such Optionee (or by such Optionee's guardian or legal representative, should one be appointed). The shares purchased pursuant to the exercise of an Incentive Stock Option shall not be transferred by the Optionee except pursuant to the Optionee's will, or the laws of descent and distribution, until such date which is the later of two years after the grant of such Incentive Stock Option or one year after the transfer of the shares to the Optionee pursuant to the exercise of such Incentive Stock Option.
5. Notice of Exercise of Option. This Option may be exercised by the
Optionee, or by the Optionee's administrators, executors or personal
representatives, by a written notice (in substantially the form of the Notice of
Exercise attached hereto as Schedule A) signed by the Optionee, or by such
administrators, executors or personal representatives, and delivered or mailed
to the Company as specified in this Agreement to the attention of the President
or such other officer as the Company may designate. Any such notice shall (a)
specify the number of shares of Stock which the Optionee or the Optionee's
administrators, executors or personal representatives, as the case may be, then
elects to purchase hereunder, (b) contain such information as may be reasonably
required by the Company pursuant to this Agreement, and (c) be accompanied by
(i) a certified or cashier's check payable to the Company in payment of the
total Exercise Price applicable to such shares as provided herein, (ii) shares
of stock owned by the Optionee and duly endorsed or accompanied by stock
transfer powers having a Fair Market Value equal to the total Exercise Price
applicable to such Shares purchased hereunder, or
(iii) a certified or cashier's check accompanied by the number of shares of stock where Fair Market Value when added to the amount of the check equal the total Exercise Price applicable to such shares purchased hereunder. Upon receipt of any such notice and accompanying payment, and subject to the terms hereof, the Company agrees to issue to the Optionee or the Optionee's administrators, executors or personal representatives, as the case may be, stock certificates for the number of shares specified in such notice registered in the name of the person exercising this Option.
6. Adjustment in Option. The number of Shares subject to this Option, the Exercise Price, and other matters are subject to adjustment during the term of this Option in accordance with Section 5.2 of the Stock Incentive Plan.
7. Termination of Employment.
(a) In the event of the termination of the Optionee's employment with
the Company or any of its Subsidiaries, other than a termination that is either
(i) for Cause, (ii) voluntary on the part of the Optionee and without written
consent of the Company, or (iii) for reasons of death or disability or
retirement, the Optionee may exercise this Option at any time within 30 days
after such termination to the extent of the number of shares which were
Purchasable hereunder at the date of such termination.
(b) In the event of a termination of the Optionee's employment that is either (i) for Cause or (ii) voluntary on the part of the Optionee and without the written consent of the Company, this Option, to the extent not previously exercised, shall terminate immediately and shall not thereafter be or become exercisable.
(c) In the event of the retirement of the Optionee at the normal retirement date as prescribed from time to time by the Company or any Subsidiary, the Optionee shall continue to have the right to exercise any Options for shares which were Purchasable at the date of the Optionee's retirement provided that, on the date which is three months after the date of retirement, the Options will become void and unexercisable unless on the date of retirement the Optionee enters into a noncompete agreement with the Company and continues to comply with such noncompete agreement. This Option does not confer upon the Optionee any right with respect to continuance of employment by the Company or by any of its Subsidiaries. This Option shall not be affected by any change of employment so long as the Optionee continues to be an employee of the Company or one of its Subsidiaries.
(d) In the event of termination of employment because of the Optionee's Permanent and Total Disability, the Optionee (or his or her personal representative) may exercise this Option, within a period ending on the earlier of (a) the last day of the one year period following the Optionee's Permanent and Total Disability or (b) the expiration date of this Option, to the extent of the number of shares which were Purchasable hereunder at the date of such termination.
(e) In the event of the Optionee's death while employed by the Company or any of its Subsidiaries or within three months after a termination of such employment (if such termination was neither (i) for Cause nor (ii) voluntary on the part of the Optionee and without the written consent of the Company), the appropriate persons described in Section 5 hereof or persons to whom all or a portion of this Option is transferred in accordance with Section 4 hereof may exercise this Option at any time within a period ending on the earlier of (a) the last day of the one year period following the Optionee's death or (b) the expiration date of this Option. If the Optionee was an employee of the Company at the time of death, this Option may be so exercised to the extent of the number of shares that were Purchasable hereunder at the date of death. If the Optionee's employment terminated prior to his or her death, this Option may be exercised only to the extent of the number of shares covered by
this Option which were Purchasable hereunder at the date of such termination.
8. Compliance with Regulatory Matters. The Optionee acknowledges that the issuance of capital stock of the Company is subject to limitations imposed by federal and state law and the Optionee hereby agrees that the Company shall not be obligated to issue any shares of Stock upon exercise of this Option that would cause the Company to violate law or any rule, regulation, order or consent decree of any regulatory authority (including without limitation the Securities and Exchange Commission) having jurisdiction over the affairs of the Company. The Optionee agrees that he or she will provide the Company with such information as is reasonably requested by the Company or its counsel to determine whether the issuance of Stock complies with the provisions described by this Section 8.
9. Forfeiture. The purpose of the Stock Incentive Plan is to attract, retain, and reward employees, to increase stock ownership and identification with the Company's interests, and to provide incentive for remaining with and enhancing the value of the Company over the long-term. Therefore, the Company and the Optionee agree as follows:
(a) If, at any time within the later of (i) one year after termination of the Optionee's employment or (ii) one year after the Optionee's exercise of any portion of this Option, the Optionee engages in any activity which constitutes a violation of any confidentiality, noncompetition, nonsolicitation, or similar provision of any employment or other agreement between the Company and the Optionee (or, if no agreement is in place between the Company and the Optionee, any Company policies pertaining to such matters), or if the Optionee engages in any activity which is inimical, contrary, or harmful to the interests of the Company (including conduct related to the Optionee's employment for which either criminal or civil penalties against the Optionee may be sought or violation of the Company's policies, including the Company's insider trading policy), then (1) this Option shall terminate effective the date on which the Optionee enters into such activity, unless terminating sooner by operation of another term or condition of this Option or the Stock Incentive Plan, and (2) any Option Gain realized by the Optionee from exercising all or a portion of this Option shall be paid by the Optionee to the Company. "Option Gain" shall mean the gain represented by the mean market price on the date of exercise over the Exercise Price, multiplied by the number of shares purchased through exercise of the Option, without regard to any subsequent market price decrease or increase. The forfeiture provisions described in this Section shall apply even if the Company does not elect otherwise to enforce the employment agreement or take other action against the Optionee, but shall not apply if termination of the Optionee's employment with the Company occurs in connection with or following a Corporate Transaction involving the Company (as defined in the Stock Incentive Plan).
(b) By accepting this Agreement, the Optionee consents to a deduction from any amounts the Company owes the Optionee from time to time (including amounts owed as wages or other compensation, fringe benefits, or vacation pay), to the extent of the amounts the Optionee owes the Company under this Section. Whether or not the Company elects to make any set-off in whole or in part, if the Company does not recover by means of set-off the full amount owed by the Optionee to the Company, calculated as set forth above, the Optionee shall pay immediately the unpaid balance to the Company. The Optionee hereby appoints the Company as its attorney-in-fact to execute any documents or do any acts necessary to exercise its rights under this Section.
(c) The Optionee may be released from its obligations under this
Section only if the Board of Directors (or its duly appointed agent) determines
in its sole discretion that such action is in the best interests of the Company.
10. Miscellaneous.
(a) This Agreement shall be binding upon the parties hereto and their representatives, successors and assigns.
(b) Unless the context clearly indicates to the contrary, all capitalized terms used herein shall have the meanings as set forth in this Agreement, or in the event a capitalized term is not clearly described in this Agreement, the meanings as set forth in the Greenville First Bancshares, Inc. 2000 Stock Incentive Plan dated February __, 2000.
(b) This Agreement is executed and delivered in, and shall be governed by the laws of, the State of South Carolina .
(c) Any requests or notices to be given hereunder shall be deemed given, and any elections or exercises to be made or accomplished shall be deemed made or accomplished, upon actual delivery thereof to the designated recipient, or three days after deposit thereof in the United States mail, registered, return receipt requested and postage prepaid, addressed, if to the Optionee, at the address set forth below and, if to the Company, to the executive offices of the Company at Post Office Box 17465, Greenville, South Carolina 29606.
(d) This Agreement may not be modified except in writing executed by each of the parties hereto.
IN WITNESS WHEREOF, the Board of Directors of the Company has caused this Stock Option Agreement to be executed on behalf of the Company and the Company's seal to be affixed hereto and attested by the Secretary or an Assistant Secretary of the Company, and the Optionee has executed this Stock Option Agreement under seal, all as of the day and year first above written.
GREENVILLE FIRST BANCSHARES, INC..
By: __________________________________
Name: R. Arthur Seaver, Jr.
Title: President and Chief Executive Officer
OPTIONEE
By: ________________________________
Name: *********
Address:______________________________
SCHEDULE A
NOTICE OF EXERCISE
To exercise Stock Options, the Optionee should complete this Schedule, execute it, and return it to the Company
The undersigned hereby notifies Greenville First Bancshares, Inc. (the "Company") of this election to exercise the undersigned's stock option to purchase shares of the Company's common stock, par value $0.01 per share (the "Common Stock"), pursuant to the Stock Option Agreement (the "Agreement") between the undersigned and the Company dated _______________________________. Accompanying this Notice is a check in the amount of $___________________ payable to the Company such amount being equal to the purchase price per share set forth in the Agreement multiplied by the number of shares being purchased hereby.
IN WITNESS WHEREOF, the undersigned has set his hand and seal, this ________ day of _________________, ---------.
OPTIONEE [OR OPTIONEE'S
ADMINISTRATOR,
EXECUTOR OR PERSONAL
REPRESENTATIVE]
Name:____________________________________
Print Name: _______________________________
| ARTICLE 9 |
| CIK: 1090009 |
| NAME: Greenville First Bancshares, Inc. |
| PERIOD TYPE | 3 MOS |
| FISCAL YEAR END | DEC 31 2000 |
| PERIOD START | JAN 01 2000 |
| PERIOD END | MAR 31 2000 |
| CASH | 1,126,801 |
| INT BEARING DEPOSITS | 0 |
| FED FUNDS SOLD | 7,740,000 |
| TRADING ASSETS | 0 |
| INVESTMENTS HELD FOR SALE | 6,469,569 |
| INVESTMENTS CARRYING | 0 |
| INVESTMENTS MARKET | 0 |
| LOANS | 13,059,001 |
| ALLOWANCE | 100,000 |
| TOTAL ASSETS | 27,746,105 |
| DEPOSITS | 17,486,026 |
| SHORT TERM | 0 |
| LIABILITIES OTHER | 426,630 |
| LONG TERM | 0 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 11,500 |
| OTHER SE | 9,822,949 |
| TOTAL LIABILITIES AND EQUITY | 27,746,105 |
| INTEREST LOAN | 144,299 |
| INTEREST INVEST | 191,658 |
| INTEREST OTHER | 0 |
| INTEREST TOTAL | 335,957 |
| INTEREST DEPOSIT | 116,533 |
| INTEREST EXPENSE | 116,533 |
| INTEREST INCOME NET | 219,424 |
| LOAN LOSSES | 100,000 |
| SECURITIES GAINS | 0 |
| EXPENSE OTHER | 395,905 |
| INCOME PRETAX | (274,119) |
| INCOME PRE EXTRAORDINARY | (274,119) |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | (274,119) |
| EPS BASIC | (.24) |
| EPS DILUTED | (.24) |
| YIELD ACTUAL | 4.5 |
| LOANS NON | 0 |
| LOANS PAST | 0 |
| LOANS TROUBLED | 0 |
| LOANS PROBLEM | 0 |
| ALLOWANCE OPEN | 0 |
| CHARGE OFFS | 0 |
| RECOVERIES | 0 |
| ALLOWANCE CLOSE | 100,000 |
| ALLOWANCE DOMESTIC | 100,000 |
| ALLOWANCE FOREIGN | 0 |
| ALLOWANCE UNALLOCATED | 0 |