-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AQkGTKAneb0phY6V8fNW2l/Ih3R5IduhybmQ8OTWIbB7OMB7FJpW3h3KWsaF1pTm faRuYy9oQUJjF1LIy+5swA== 0000950168-96-000028.txt : 19960112 0000950168-96-000028.hdr.sgml : 19960111 ACCESSION NUMBER: 0000950168-96-000028 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19960110 EFFECTIVENESS DATE: 19960110 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONSBANK CORP CENTRAL INDEX KEY: 0000070858 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 560906609 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 POS SEC ACT: 1933 Act SEC FILE NUMBER: 033-63351 FILM NUMBER: 96502486 BUSINESS ADDRESS: STREET 1: NATIONSBANK CORPORATE CENTER STREET 2: NC1007 19 04 CITY: CHARLOTTE STATE: NC ZIP: 28255 BUSINESS PHONE: 7043865000 MAIL ADDRESS: STREET 1: NATIONALSBANK CORPORATE CENTER STREET 2: NC1007 19 04 CITY: CHARLOTTE STATE: NC ZIP: 28255 FORMER COMPANY: FORMER CONFORMED NAME: NCNB CORP DATE OF NAME CHANGE: 19920107 S-8 POS 1 NATIONSBANK S-8 POST EFFECTIVE AMEND. NO. 1 Registration No. 33-63351 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 1 ON FORM S-8 TO REGISTRATION STATEMENT ON FORM S-4 UNDER THE SECURITIES ACT OF 1933 ---------- NATIONSBANK CORPORATION (Exact Name of Registrant as Specified in Its Charter) NORTH CAROLINA 56-0906609 (State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization) Identification No.) NATIONSBANK CORPORATE CENTER 100 NORTH TRYON STREET CHARLOTTE, NORTH CAROLINA 28255 (Address of Principal Executive Offices) ---------- BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN (1982) SOUTHERN BANCORP, INC. 1986 INCENTIVE STOCK OPTION PLAN AND 1986 NONSTATUTORY STOCK OPTION PLAN HERITAGE BANCSHARES, INC. EMPLOYEES' NON-QUALIFIED STOCK OPTION PLAN BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN (1992) BANK SOUTH CORPORATION 1993 EQUITY INCENTIVE PLAN 1988 SUBSTITUTE STOCK OPTION PLAN OF CHATTAHOOCHEE BANCORP, INC. FOR THE 1987 STOCK OPTION PLAN OF THE BUCKHEAD BANK 1988 SUBSTITUTE STOCK OPTION PLAN OF CHATTAHOOCHEE BANCORP, INC. FOR THE 1987 STOCK OPTION PLAN OF THE CHATTAHOOCHEE FINANCIAL CORPORATION THE MERCHANT BANK OF ATLANTA INCENTIVE STOCK OPTION PLAN BANK SOUTH CORPORATION 1994 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS GWINNETT BANCSHARES, INC. STOCK OPTION PLAN (Full title of the Plans) ---------- PAUL J. POLKING GENERAL COUNSEL NATIONSBANK CORPORATION NATIONSBANK CORPORATE CENTER 100 NORTH TRYON STREET CHARLOTTE, NORTH CAROLINA 28255 (Name and Address of Agent For Service) (704) 386-5000 (Telephone Number, Including Area Code, of Agent For Service) ---------- Copy To: R. DOUGLAS HARMON SMITH HELMS MULLISS & MOORE, L.L.P. POST OFFICE BOX 31247 CHARLOTTE, NORTH CAROLINA 28231 (704) 343-2000 ---------- This Post-Effective Amendment No. 1 covers shares of the Registrant's Common Stock originally registered on the Registration Statement on Form S-4 to which this is an amendment. The registration fees in respect of such Common Stock were paid at the time of the original filing of the Registration Statement on Form S-4 relating thereto. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The documents constituting a Prospectus (a "Prospectus") with respect to this PostEffective Amendment No. 1 on Form S-8 to the Registration Statement on Form S-4 of NationsBank Corporation (the "Registrant") are kept on file at the offices of the Registrant in accordance with Rule 428 promulgated pursuant to the Securities Act of 1933, as amended (the "Securities Act"). The Registrant will provide without charge to participants in the Plans referenced herein, on the written or oral request of any such person, a copy of any or all of the documents constituting a Prospectus. Written requests for such copies should be directed to Charles J. Cooley, Principal Corporate Personnel Officer, NationsBank Corporation, NationsBank Corporate Center, 100 North Tryon Street, Charlotte, North Carolina 28255. Telephone requests may be directed to (704) 386-5000. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents, which have been heretofore filed by the Registrant with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are incorporated by reference herein: (a) The Registrant's Annual Report on Form 10-K for the year ended December 31, 1994; (b) The Registrant's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and September 30, 1995 and Current Reports on Form 8-K filed January 26, 1995, February 21, 1995, March 2, 1995 (two reports on this date), March 21, 1995 (amended by Form 8-K/A Amendment No. 1 filed March 21, 1995), March 27, 1995, April 24, 1995, April 25, 1995, May 16, 1995, July 10, 1995, July 24, 1995, August 31, 1995, September 20, 1995, October 20, 1995 (two reports on this date), November 9, 1995, and December 15, 1995; and (c) The description of the Registrant's Common Stock contained in its registration statement filed pursuant to Section 12 of the Exchange Act, and any amendment or report filed for the purpose of updating such description. All documents filed by the Registrant with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the effectiveness of this Registration Statement and prior to the filing of a post-effective amendment hereto that either indicates that all securities offered hereto have been sold or deregisters all securities then remaining unsold 2 shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein or therein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. The Registrant will provide without charge to each person to whom a Prospectus constituting a part of this Registration Statement is delivered, on the written or oral request of any such person, a copy of any or all of the documents incorporated herein and in the Prospectus by reference (other than exhibits to such documents which are not specifically incorporated by reference in such documents). Written requests for such copies should be directed to Charles J. Cooley, Principal Corporate Personnel Officer, NationsBank Corporation, NationsBank Corporate Center, 100 North Tryon Street, Charlotte, North Carolina 28255. Telephone requests may be directed to (704) 386-5000. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. The legality of the Registrant's Common Stock to be issued in connection with the Plans has been passed upon by Smith Helms Mulliss & Moore, L.L.P., Charlotte, North Carolina. As of the date of this Post-Effective Amendment No. 1 on Form S-8, certain attorneys of Smith Helms Mulliss & Moore, L.L.P., beneficially owned an aggregate of approximately 50,000 shares of the Registrant's Common Stock. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. There are no provisions in the Registrant's Restated Articles of Incorporation, and no contracts between the Registrant and its directors and officers, relating to indemnification. The Registrant's Restated Articles of Incorporation prevent the recovery by the Registrant of monetary damages against its directors. However, in accordance with the provisions of the North Carolina Business Corporation Act (the "Act"), the Registrant's Amended and Restated Bylaws provide that, in addition to the indemnification of directors and officers otherwise provided by the Act, the Registrant shall, under certain circumstances, indemnify its directors, executive officers and certain other designated officers against any and all liability and litigation expense, including reasonable attorneys' fees, arising out of their status or activities as directors and officers, except for liability or litigation expense incurred on account of activities that were at the time known or reasonably should have been known by such director or officer to be clearly in conflict with the best interests of the Registrant. Pursuant to such Bylaws and as authorized by statute, the Registrant maintains insurance on behalf of its directors and officers against liability asserted against such persons in such capacity whether or not such directors or officers have the right to indemnification pursuant to the Bylaws or otherwise. 3 In addition to the above-described provisions, Sections 55-8-50 through 55-8-58 of the Act contain provisions prescribing the extent to which directors and officers shall or may be indemnified. Section 55-8-51 of the Act permits a corporation, with certain exceptions, to indemnify a current or former director against liability if (i) he conducted himself in good faith, (ii) he reasonably believed (x) that his conduct in his official capacity with the corporation was in its best interests and (y) in all other cases his conduct was at least not opposed to the corporation's best interests, and (iii) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. A corporation may not indemnify a current or former director in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation or in connection with a proceeding charging improper personal benefit to him in which he was adjudged liable on such basis. The above standard of conduct is determined by the Board of Directors or a committee thereof, special legal counsel or the shareholders as prescribed in Section 55-8-55 of the Act. Sections 55-8-52 and 55-8-56 of the Act require a corporation to indemnify a director or officer in the defense of any proceeding to which he was a party because of his capacity as a director or officer against reasonable expenses when he is wholly successful in his defense, unless the articles of incorporation provide otherwise. Upon application, the court may order indemnification of the director or officer if he is adjudged fairly and reasonably so entitled under Section 55-8-54. Section 55-8-56 allows a corporation to indemnify and advance to an officer, employee or agent who is not a director to the same extent as a director or as otherwise set forth in the corporation's articles of incorporation or bylaws or by a resolution of the board of directors. In addition, Section 55-8-57 permits a corporation to provide for indemnification of directors, officers, employees or agents, in its articles of incorporation or bylaws or by contract or resolution, against liability in various proceedings and to purchase and maintain insurance policies on behalf of these individuals. THE FOREGOING IS ONLY A GENERAL SUMMARY OF CERTAIN ASPECTS OF NORTH CAROLINA LAW DEALING WITH INDEMNIFICATION OF DIRECTORS AND OFFICERS AND DOES NOT PURPORT TO BE COMPLETE. IT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RELEVANT STATUTES CONTAINING DETAILED SPECIFIC PROVISIONS REGARDING THE CIRCUMSTANCES UNDER WHICH AND THE PERSON FOR WHOSE BENEFIT INDEMNIFICATION SHALL OR MAY BE MADE AND ACCORDINGLY ARE INCORPORATED HEREIN BY REFERENCE. ITEM 8. EXHIBITS. The following exhibits are filed with or incorporated by reference in this Registration Statement. EXHIBIT NO. DESCRIPTION OF EXHIBIT 5.1 Opinion of Smith Helms Mulliss & Moore, L.L.P. as to the legality of the securities.* 4 23.1 Consent of Price Waterhouse LLP. 23.2 Consent of Smith Helms Mulliss & Moore, L.L.P. (included in Exhibit 5.1).* 24.1 Power of Attorney and Certified Resolutions.* 99.1 Bank South Corporation Key Employee Stock Option Plan (1982). 99.2 Southern Bancorp, Inc. 1986 Incentive Stock Option Plan and 1986 Nonstatutory Stock Option Plan. 99.3 Material Provisions of the Heritage Bancshares, Inc. Employees' Non-Qualified Stock Option Plan. 99.4 Bank South Corporation Key Employee Stock Option Plan (1992). 99.5 Bank South Corporation 1993 Equity Incentive Plan. 99.6 1988 Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the 1987 Stock Option Plan of The Buckhead Bank. 99.7 1988 Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the 1987 Stock Option Plan of The Chattahoochee Financial Corporation. 99.8 The Merchant Bank of Atlanta Incentive Stock Option Plan. 99.9 Bank South Corporation 1994 Stock Option Plan for Outside Directors. 99.10 Gwinnett Bancshares, Inc. Stock Option Plan. 99.11 Provisions of North Carolina law relating to indemnification of directors and officers (incorporated herein by reference to Exhibit 99.1 of the NationsBank Corporation Registration Statement on Form S-3 (Registration No. 33-63097) filed on September 29, 1995.) - -------------------- * Previously filed as an exhibit to the Registrant's Registration Statement on Form S-4 to which this is Post-Effective Amendment No. 1. 5 ITEM 9. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration Statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement 6 relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. 7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Post-Effective Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Charlotte, State of North Carolina, on January 10, 1996. NATIONSBANK CORPORATION By: HUGH L. McCOLL, JR.* Hugh L. McColl, Jr. Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date HUGH L. McCOLL, JR. * Chairman of the Board, Chief January 10, 1996 - -------------------------------------------- Hugh L. McColl, Jr. Executive Officer and Director (Principal Executive Officer) JAMES H. HANCE, JR. * Vice Chairman and January 10, 1996 - -------------------------------------------- James H. Hance, Jr. Chief Financial Officer (Principal Financial Officer) MARC D. OKEN * Executive Vice President and January 10, 1996 - -------------------------------------------- Marc D. Oken Chief Accounting Officer (Principal Accounting Officer) RONALD W. ALLEN * Director January 10, 1996 - -------------------------------------------- Ronald W. Allen
8 WILLIAM M. BARNHARDT * Director January 10, 1996 - -------------------------------------------- William M. Barnhardt THOMAS E. CAPPS * Director January 10, 1996 - -------------------------------------------- Thomas E. Capps CHARLES W. COKER * Director January 10, 1996 - -------------------------------------------- Charles W. Coker THOMAS G. COUSINS * Director January 10, 1996 - -------------------------------------------- Thomas G. Cousins ALAN T. DICKSON * Director January 10, 1996 - -------------------------------------------- Alan T. Dickson W. FRANK DOWD, JR. * Director January 10, 1996 - -------------------------------------------- W. Frank Dowd, Jr. PAUL FULTON * Director January 10, 1996 - -------------------------------------------- Paul Fulton L. L. GELLERSTEDT, JR. * Director January 10, 1996 - -------------------------------------------- L. L. Gellerstedt, Jr. TIMOTHY L. GUZZLE * Director January 10, 1996 - -------------------------------------------- Timothy L. Guzzle W. W. JOHNSON * Director January 10, 1996 - -------------------------------------------- W. W. Johnson BUCK MICKEL * Director January 10, 1996 - -------------------------------------------- Buck Mickel 9 JOHN J. MURPHY * Director January 10, 1996 - -------------------------------------------- John J. Murphy JOHN C. SLANE * Director January 10, 1996 - -------------------------------------------- John C. Slane JOHN W. SNOW * Director January 10, 1996 - -------------------------------------------- John W. Snow MEREDITH R. SPANGLER * Director January 10, 1996 - -------------------------------------------- Meredith R. Spangler ROBERT H. SPILMAN * Director January 10, 1996 - -------------------------------------------- Robert H. Spilman - -------------------------------------------- Director January __, 1996 Ronald Townsend - -------------------------------------------- Director January __, 1996 E. Craig Wall, Jr. JACKIE M. WARD * Director January 10, 1996 - -------------------------------------------- Jackie M. Ward *By:/s/ CHARLES M. BERGER Charles M. Berger Attorney-in-Fact 10 INDEX TO EXHIBITS Exhibit No. Description of Exhibit 5.1 Opinion of Smith Helms Mulliss & Moore, L.L.P. as to legality of securities.* 23.1 Consent of Price Waterhouse LLP. 23.2 Consent of Smith Helms Mulliss & Moore, L.L.P. (included in Exhibit 5.1).* 24.1 Power of Attorney and Certified Resolutions.* 99.1 Bank South Corporation Key Employee Stock Option Plan (1982). 99.2 Southern Bancorp, Inc. 1986 Incentive Stock Option Plan and 1986 Nonstatutory Stock Option Plan. 99.3 Material Provisions of the Heritage Bancshares, Inc. Employees' Non-Qualified Stock Option Plan. 99.4 Bank South Corporation Key Employee Stock Option Plan (1992). 99.5 Bank South Corporation 1993 Equity Incentive Plan. 99.6 1988 Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the 1987 Stock Option Plan of The Buckhead Bank. 99.7 1988 Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the 1987 Stock Option Plan of The Chattahoochee Financial Corporation. 99.8 The Merchant Bank of Atlanta Incentive Stock Option Plan. 99.9 Bank South Corporation 1994 Stock Option Plan for Outside Directors. 99.10 Gwinnett Bancshares, Inc. Stock Option Plan. Exhibit No. Description of Exhibit 99.11 Provisions of North Carolina law relating to indemnification of directors and officers (incorporated herein by reference to Exhibit 99.1 of the NationsBank Corporation Registration Statement on Form S-3 (Registration No. 33-63097) filed on September 29, 1995.) - -------------------- * Previously filed as an exhibit to the Registrant's Registration Statement on Form S-4 to which this is Post-Effective Amendment No. 1. EX-23 2 EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Post-Effective Amendment No. 1 on Form S-8 to the Registration Statement on Form S-4 (Registration No. 33-63351) of NationsBank Corporation of our report dated January 13, 1995, which appears on page 57 of the 1994 Annual Report to Shareholders of NationsBank Corporation, which is incorporated by reference in NationsBank Corporation's Annual Report on Form 10-K for the year ended December 31, 1994. PRICE WATERHOUSE LLP Charlotte, North Carolina January 10, 1996 EX-99 3 EXHIBIT 99.1 BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN (1982) BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN ARTICLE I Purpose, Scope and Administration of the Plan 1.1 Purpose The purpose of the Plan is to promote the long-term success of Bank South Corporation and its subsidiaries by providing financial incentives to key employees who are in positions to make significant contributions toward such success. The Plan is designed to attract individuals of outstanding ability to employment with Bank South Corporation and its subsidiaries and to encourage key employees to acquire a proprietary interest in Bank South Corporation, to continue employment with Bank South Corporation or its subsidiaries and to render superior performance during such employment. 1.2 Definitions Unless the context clearly indicates otherwise, for purposes of this Plan the following terms have the respective meanings set forth below: (a) "Board of Directors" means the Board of Directors of the Bank South Corporation. (b) "Code" means the Internal Revenue Code of 1954, as amended. (c) "Committee" means the Stock Option Committee of the Board of Directors, which Committee shall be composed of not less than three members of the Board of Directors who are not employees of the Company and who are not at the time of exercising discretion in administering the Plan eligible, and have not at any time within one year prior thereto been eligible, for selection as a person to whom Options or Stock Appreciation Rights may be granted pursuant to the Plan or any other plan of the Company or any of its affiliates entitling the participants therein to acquire stock, stock options or stock appreciation rights of the Company or any of its affiliates. (d) "Common Stock" means the common stock of Bank South Corporation, par value $5.00 per share, or such other class of shares or other securities to which the provisions of the Plan may be applicable by reason of the operation of Section 4.1 hereof. (e) "Company" means Bank South Corporation, and also means any corporation of which a majority of the voting 2 capital stock is owned directly or indirectly by Bank South Corporation or any of its subsidiaries which is a Company hereunder, and any other corporation designated by the Committee as being a Company hereunder (but only during the period of such ownership or designation). (f) "Fair Market Value" of a share of Common Stock on any particular date means (1) if the Common Stock is not then traded on a national stock exchange, the mean between the closing composite inter-dealer "bid" and "ask" prices for Common Stock, as quoted by NASDAQ (i) on such date, or (ii) if no "bid" and "ask" prices are quoted on such date, then on the next preceding date on which such prices were quoted; or (2) if the Common Stock is then traded on a national stock exchange, the closing price on such date of a share of the Common Stock as traded on the largest stock exchange on which it is then traded. (g) "Grant Date," as used with respect to a particular Option or Stock Appreciation Right, means the date as of which such Option or Right is granted by the Committee pursuant to the Plan. 3 (h) "Grantee" means the key employee to whom an Option or Stock Appreciation Right is granted by the Committee pursuant to the Plan. (i) "Incentive Stock Option" means an Option that qualifies as an Incentive Stock Option as described in Section 422A of the Code. (j) "Option" means an Option granted by the Committee pursuant to Article II to purchase shares of Common Stock, which shall be designated at the time of grant as either an Incentive Stock Option or a Supplemental Stock Option, as provided in Section 2.1 hereof. (k) "Option Agreement" means the agreement between the Company and a Grantee under which the Grantee is granted an Option and Stock Appreciation Rights pursuant to the Plan. (l) "Option Period" means, with respect to any Option or Stock Appreciation Right granted hereunder, the period beginning on the Grant Date and ending at such time not later than the tenth annual anniversary of the Grant Date, as the Committee, in its sole discretion, shall determine and during which the Option or Stock Appreciation Right may be exercised. 4 (m) "Plan" means the Bank South Corporation Key Employee Stock Option Plan as set forth herein and as amended from time to time. (n) "Retirement," as applied to a Grantee, means the Grantee's termination of employment in a manner which qualifies the Grantee to receive immediately payable retirement benefits under the Bank of the South, N.A. Employees Retirement Plan and Trust, under the successor or replacement of such Retirement Plan if it is then no longer in effect or under any other retirement plan maintained or adopted by Bank South Corporation which is determined by the Committee to be the functional equivalent of such Retirement Plan. (o) "Stock Appreciation Right" means a right granted pursuant to Article III hereof by the Committee, in conjunction with an Option, to receive payment equal to any increase in the Fair Market Value of a share of Common Stock from the Grant Date to the date of exercise of such right, in lieu of exercise of the Option for such share. 5 (p) "Supplemental Stock Option" means any Option granted under this Plan, other than an Incentive Stock Option. (q) "Total and Permanent Disability," as applied to a Grantee, means that the Grantee (1) has established to the satisfaction of the Committee that the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months (all within the meaning of Section 105[d] [4] of the Code), and (2) has satisfied any requirement imposed by the Committee in regard to evidence of such disability. 1.3 Aggregate Limitation (a) The aggregate number of shares of Common Stock with respect to which Options and Stock Appreciation Rights may be granted shall not exceed 225,000 shares of Common Stock, subject to possible adjustment in accordance with Section 4.1. (b) Any shares of Common Stock to be delivered by the Company upon the exercise of the Options or Stock 6 Appreciation Rights shall at the discretion of the Board of Directors, be issued from Bank South Corporation's authorized but unissued shares of Common Stock or be transferred from any available treasury stock. (c) In the event that any Option or Stock Appreciation Right expires or otherwise terminates prior to being fully exercised, the Committee may grant new Options and Stock Appreciation Rights hereunder to any eligible Grantee for the shares with respect to which the expired or terminated Option or Stock Appreciation Rights were not exercised. 1.4 Administration of the Plan (a) The Plan shall be administered by the Committee which shall have the authority: (1) To determine those key employees of the Company to whom, and the times at which, Options and Stock Appreciation Rights shall be granted and the number of shares of Common Stock to be subject to each such Option and Rights, taking into consideration the nature of the services 7 rendered by the particular employee, the employee's potential contribution to the long-term success of the Company and such other factors as the Committee in its discretion shall deem relevant; (2) To interpret and construe the provisions of the Plan and to establish rules and regulations relating to it; (3) To prescribe the terms and conditions of the Option Agreements for the grant of Options and Stock Appreciation Rights (which need not be identical) in accordance and consistent with the requirements of the Plan; and (4) To make all other determinations necessary or advisable to administer the Plan in a proper and effective manner. (b) All decisions and determinations of the Committee in the administration of the Plan and on questions or other matters concerning the Plan or any Option or Stock Appreciation Right shall be final, conclusive and binding on all persons, including, without limitation, the Company, the shareholders and directors of the Company and any persons having any 8 interest in any Options or Stock Appreciation Rights which may be granted under the Plan. 1.5 Eligibility for Awards The Committee shall designate from time to time the key employees of the Company who are to be granted Options and Stock Appreciation Rights. In no event may a member of the Committee or any Director who is not an employee of the Company be granted an Option or Stock Appreciation Right under this Plan. 1.6 Effective Date and Duration of Plan The Plan shall become effective upon its adoption by the Board of Directors; provided, that any grant of Options or Stock Appreciation Rights under the Plan prior to approval of the Plan by the shareholders of Bank South Corporation is subject to such shareholder approval with twelve months of adoption of the Plan by the Board of Directors. Unless previously terminated by the Board of Directors, the Plan (but not any then outstanding Options or Stock Appreciation Rights which have not yet expired or otherwise terminated) shall terminate on the tenth annual anniversary of its adoption by the Board of Directors. 9 ARTICLE II Stock Options 2.1 Grant of Options The Committee may from time to time, subject to the provisions of the Plan, grant Options to key employees under appropriate Option Agreements to purchase shares of Common Stock up to the aggregate number of shares of Common Stock set forth in Section 1.3(a). The Committee may designate any Option which satisfies the requirements of Section 2.3 hereof as an Incentive Stock Option and may designate any Option granted hereunder as a Supplemental Stock Option, or the Committee may designate a portion of an Option as an Incentive Stock Option (so long as that portion satisfies the requirements of Section 2.3 hereof) and the remaining portion as a Supplemental Stock Option. Any portion of an Option that is not designated as an Incentive Stock Option shall be a Supplemental Stock Option. A Supplemental Stock Option must satisfy the requirements of Section 2.2 hereof, but shall not be subject to the requirements of Section 2.3. 2.2 Option Requirements (a) An Option shall be evidenced by an Option Agreement specifying the number of shares of Common Stock that 10 may be purchased by its exercise and containing such other terms and conditions consistent with the Plan as the Committee shall determine to be applicable to that particular Option. (b) No Option shall be granted under the Plan on or after the tenth annual anniversary of the date upon which the Plan was adopted by the Board of Directors. (c) An Option shall not be exercisable during the first twelve months commencing on the Grant Date except as may be specifically allowed by the Committee in the event of a merger, acquisition or other extraordinary transaction in which Bank South Corporation is not the surviving entity, in the event of a change in the control (as defined in Rule 12b-2(f) promulgated under the Securities Exchange Act of 1934) or in the event the Committee, in its sole discretion, otherwise determines and specifies in the applicable Option Agreement that an Option is exercisable during the first twelve months following its Grant Date. (d) An Option shall expire by its terms at the expiration of the Option Period and shall not be exercisable thereafter. 11 (e) The Committee may provide in the Option Agreement for the expiration or termination of the Option prior to the expiration of the Option Period, upon the occurrence of any event specified by the Committee. (f) The option price per share of Common Stock shall be equal to the Fair Market Value of a share of Common Stock on the Grant Date. (g) An Option shall not be transferable other than by will or the laws of descent and distribution and, during the Grantee's lifetime, an Option shall be exercisable only by the Grantee, or if the Grantee is disabled and the Option remains exercisable, by his or her duly appointed guardian or other legal representative. (h) Notwithstanding the Option Period applicable to an Option granted hereunder, such Option, to the extent that it has not previously been exercised, shall terminate upon the earliest to occur of (1) the expiration of the applicable Option Period as set forth in the Option Agreement granting such Option, (2) the expiration of three months after the Grantee's 12 Retirement, (3) the expiration of one year after the Grantee ceases to be an employee of the Company due to Total and Permanent Disability, (4) the expiration of two years after the Grantee ceases to be an employee of the Company due to the death of the Grantee or such later time as may be approved by the Committee, or (5) the date on which the Grantee gives the Company, or the Company gives the Grantee, notice of termination of the Grantee's employment with the Company for any reason other than Retirement, Total and Permanent Disability or death. (i) A person electing to exercise an Option shall give written notice of such election to the Company, in such form as the Committee may require, accompanied by payment in the manner determined by the Committee, of the full purchase price of the shares of Common Stock for which the election is made. Payment of the purchase price shall be made in cash or in such other form as the Committee may approve, including shares of Common Stock valued at their Fair Market Value on the date of exercise of the Option. 13 (j) The exercise of any number of Stock Appreciation Rights granted under an Option Agreement shall result in a simultaneous corresponding reduction in the number of shares of Common Stock then available for purchase by exercise of the related Option. 2.3 Incentive Stock Option Requirements (a) An Option designated by the Committee as an Incentive Stock Option is intended to qualify as an "incentive stock option" within the meaning of Subsection (b) of Section 422A of the Code and shall satisfy, in addition to the conditions of Section 2.2 above, the conditions set forth in this Section 2.3. (b) An Incentive Stock Option shall not be granted to an individual who, on the Grant Date, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company, unless the Committee provides in the Option Agreement with any such individual that the option price per share of Common Stock will not be less than 110% of the Fair Market Value of a share of Common Stock on the Grant Date and that the Option 14 Period will not extend beyond five years from the Grant Date. (c) An Incentive Stock Option shall not be exercisable while there is outstanding (within the meaning of Section 422A[c][7] of the Code) any other "incentive stock option," within the meaning of Subsection (b) of Section 422A of the Code, which was granted before the granting of such Incentive Stock Option to purchase Common Stock or any other stock in the Company, in a corporation which (at the time of the granting of such Option) is a parent or subsidiary corporation of the Company or in a predecessor corporation of any such corporations. (d) The aggregate Fair Market Value, determined on the Grant Date, of the shares of Common Stock with respect to which any Grantee may be granted one or more Incentive Stock Options under the Plan or incentive stock options (within the meaning of Sub- section [b] of Section 422A of the Code) under any other plan of the Company or any parent or subsidiary thereof, in any calendar year shall not exceed $100,000.00 plus any "unused limit carryover" to such year, determined in accordance with Section 422A(c)(4) of the Code. ARTICLE III Stock Appreciation Rights 3.1 Grant of Rights (a) In conjunction with any Option granted hereunder, the Committee may, in its discretion, grant a Stock Appreciation Right with respect to each share of Common Stock which may be purchased by the exercise of such Option. (b) Upon exercise of a Stock Appreciation Right, the Company shall pay the amount by which the Fair Market Value of a share of Common Stock on the date of exercise exceeds the Fair Market Value of a share of Common Stock on the Grant Date, but only to the extent that such amount does not exceed 200% of the Fair Market Value of a share of Common Stock on the Grant Date. A Stock Appreciation Right may not be exercised unless the Fair Market Value of a share of Common Stock on the date of exercise exceeds the Fair Market Value of a share of Common Stock on the Grant Date. (c) Payment upon exercise of a Stock Appreciation Right may be made, in the sole discretion of the Committee, 15 in (1) cash, (2) in shares of Common Stock valued at Fair Market Value on the date of exercise, or (3) partly in cash and partly in shares of Common Stock. 3.2 Rights Requirements (a) Stock Appreciation Rights shall be granted under and evidenced by the Option Agreement under which the related Option is granted, containing such terms and conditions consistent with the Plan as the Committee shall determine, and shall be exercisable to the extent allowed under such terms and conditions. (b) Stock Appreciation Rights granted in relation to an Option (1) shall be exercisable only to the extent and only when the option is exercisable, (2) shall expire or otherwise terminate simultaneously with the expiration or termination of the related Option, (3) shall be transferable only when the related Option is transferable and under the same conditions, (4) shall be exercised by the Grantee giving written notice of such exercise to the Company, in such form as the Committee may require, and (5) shall be reduced upon each exercise of the related Option by the number of Stock Appreciation 16 Rights which corresponds to the number of shares of Common Stock purchased pursuant to such exercise. ARTICLE IV General Provisions 4.1 Adjustment Provisions (a) In the event of (1) any dividend payable in shares of Common Stock; (2) any recapitalization, reclassification, split-up or consolidation of, or other change in, the Common Stock; or (3) an exchange of the outstanding shares of Common Stock, in connection with a merger, consolidation or other reorganization of or involving Bank South Corporation or a sale by Bank South Corporation of all or a portion of its assets, for a different number or class of shares of stock or other securities of Bank South Corporation or for shares of the stock or other securities of any other corporation; then the Committee shall, in such manner as it shall determine in its sole discretion, appropriately adjust the number and class of shares or other securities which shall be subject to Options and Stock Appreciation Rights and/or the purchase price 17 per share which must be paid thereafter upon exercise of any Option and which will be used to determine the amount which any Grantee would receive upon exercise thereafter of Stock Appreciation Rights. Any such adjustments made by the Committee shall be final, conclusive and binding upon all persons, including, without limitation, the Company, the shareholders and directors of the Company and any persons having any interest in any Options or Stock Appreciation Rights which may be granted under the Plan. (b) Except as provided in paragraph (a) immediately above, issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class shall not affect the Options or Stock Appreciation Rights. 4.2 Additional Conditions Any shares of Common Stock issued or transferred under any provision of the Plan may be issued or transferred subject to such conditions, in addition to those specifically pro- vided in the Plan, as the Committee or Company may impose. 4.3 No Rights as Shareholder or to Employment No Grantee or any other person authorized to purchase Common Stock upon exercise of an Option shall have any 18 interest in or shareholder rights with respect to any shares of the Common Stock which are subject to any Option or Stock Appreciation Rights until such shares have been issued and delivered to the Grantee or any such person pursuant to the exercise of such Option. Furthermore, the Plan shall not confer upon any Grantee any rights of employment with the Company, including without limitation any right to continue in the employ of the Company, or affect the right of the Company to terminate the employment of a Grantee at any time, with or without cause. 4.4 Legal Restrictions If in the opinion of legal counsel for the Company the issuance or sale of any shares of Common Stock pursuant to the exercise of an Option would not be lawful for any reason, including without limitation the inability of the Company to obtain from any governmental authority or regulatory body having jurisdiction the authority deemed by such counsel to be necessary to such issuance or sale, the Company shall not be obligated to issue or sell any Common Stock pursuant to the exercise of an Option to its Grantee or any other authorized person unless a registration statement that complies with the provisions of the Securities Act of 1933, as amended (the "Act") in respect of such shares 19 is in effect at the time thereof, or other appropriate action has been taken under and pursuant to the terms and provisions of the Act, or the Company receives evidence satisfactory to such counsel that the issuance and sale of such shares, in the absence of an effective registration statement or other appropriate action, would not constitute a violation of the Act or any applicable state securities law. The Company is in no event obligated to register any such shares, to comply with any exemption from registration requirements or to take any other action which may be required in order to permit, or to remedy or remove any prohibition or limitation on, the issuance or sale of such shares to any Grantee or other authorized person. 4.5 Rights Unaffected The existence of the Options and Stock Appreciation Rights shall not affect: the right or power of the Company or its shareholders to make adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business; any issue of bonds, debentures, preferred or prior preference stocks affecting the Common Stock or the rights thereof; the dissolution or liquidation of the Company, or sale or transfer of any part of its assets or business; or any other corporate act, whether of a similar character or otherwise. 20 4.6 Withholding Taxes As a condition of exercise of an Option or Stock Appreciation Right, the Company may, in its sole discretion, withhold or require the Grantee to pay or reimburse the Company for any taxes which the Company determines are required to be withheld in connection with the grant or any exercise of an Option or Stock Appreciation Right. 4.7 Choice of Law The validity, interpretation and administration of the Plan and of any rules, regulations, determinations or decisions made thereunder, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with the laws of the State of Georgia. Without limiting the generality of the foregoing, the period within which any action in connection with the Plan must be commenced shall be governed by the Laws of the State of Georgia, without regard to the place where the act or omission complained of took place, the residence of any party to such action or the place where the action may be brought or maintained. 21 4.8 Amendment, Suspension and Termination of Plan The Plan may, from time to time, be terminated, suspended or amended by the Board of Directors in such respects as it shall deem advisable in order that the Incentive Stock Options granted hereunder shall be "incentive stock options" as such term is defined in Section 422A of the Code, or to conform to any change in any law or regulation governing same or in any other respect; provided, however, that no such amendment shall change the following: (a) The maximum aggregate number of shares for which Options may be granted under the Plan, except as required under any adjustment pursuant to Section 4.1 hereof; (b) The Option exercise price, with the exception of any change in such price required as a result of any adjustment pursuant to Section 4.1 hereof and with the further exception of changes in determining Fair Market Value of shares of Common Stock to conform with any then applicable provision of the Code or regulations promulgated thereunder; (c) The maximum period during which Options or Stock Appreciation Rights may be exercised; 22 (d) The maximum amount which may be paid upon exercise of a Stock Appreciation Right; (e) The termination date of the Plan in any manner which would extend such date; or (f) The requirements as to eligibility for participation in the Plan in any material respect. Notwithstanding any other provision herein contained, the Plan shall terminate and all Options and Stock Appreciation Rights previously granted shall terminate, in the event and on the date of liquidation or dissolution of the Company. AS APPROVED BY THE BOARD OF DIRECTORS OF BANK SOUTH CORPORATION ON JUNE 17, 1982. BANK SOUTH CORPORATION BY: ------------------------ Chairman of the Board 23 AMENDMENT NO. 3 TO BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN THIS AMENDMENT made as of the 13 day of February, 1992, by BANK SOUTH CORPORATION, a corporation organized under the laws of the State of Georgia (the "Company"); W I T N E S S E T H: WHEREAS, the Company established the Bank South Corporation Key Employee Stock Option Plan (the "Plan"), which was approved by the Board of Directors of Bank South Corporation on June 17, 1982; and WHEREAS, the Board of Directors has previously approved certain amendments to the Plan, effective as of August 5, 1991, in connection with the employment of certain executives by the Company; and WHEREAS, the Company now desires to evidence the adoption of such amendments in the manner hereinafter provided; NOW, THEREFORE, the Plan is hereby amended as follows: 1. Section 2.2(c)(2) of the Plan is hereby amended by adding the following to the end of the present section: "The Committee may, pursuant to its authority under Sections 2.2(a) and 2.2(c)(1)(c), expand or restrict the events which constitute a 'Change in Control' for purposes of all or a portion of the Options covered by a particular Option Agreement." 2. Section 2.2(f) of the Plan is hereby amended by deleting the present section in its entirety and substituting the following in lieu thereof: "(f) The option price per share of Common Stock shall be not less than the Fair Market Value of a share of Common Stock on the Grant Date." 3. Section 2.2(h) of the Plan is hereby amended by adding the following after the word "hereunder" and before the comma in the second line of the present section: "and except as otherwise provided in the applicable Option Agreement" 4. The foregoing amendments to the Plan shall be effective as of August 5, 1991. Except as herein amended, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officers the day and year first above written. (CORPORATE SEAL) BANK SOUTH CORPORATION ATTEST: By: (Signature of Gregory N. Stoddard) By: (Signature of Ralph E. Hutchins, Jr.) Title: Corporate Secretary Title: Sr. Executive Vice President This is a true and correct copy of a resolution passed by the Board of Directors on April 16, 1987. (Signature of Edward B. Grimball) Edward B. Grimball, Secretary RESOLUTION FOR AMENDMENT NO. 2 TO THE BANK SOUTH KEY EMPLOYEE STOCK OPTION PLAN Corporation WHEREAS, the Board has reviewed and considered Amendment No. 2 to the Bank South Key Employee Stock Option Plan in the form attached hereto; BE IT RESOLVED, that amendment No. 2 to the Plan is hereby adopted and approved, such amendment to be effective January 1, 1987; that the officers of the Corporation are authorized and directed to execute this amendment; and that such amendment be submitted to the Shareholders of the Corporation for approval. AMENDMENT NO. 2 TO THE BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN THIS AMENDMENT, made this day of March, 1987 by Bank South Corporation, a corporation organized under the laws of the State of Georgia (hereinafter together with the subsidiaries collectively referred to as the "Company"): W I T N E S S E T H: WHEREAS, the Company established the Bank South Corporation Key Employee Stock Option Plan (the "Plan"), which was approved by the Board of Directors of Bank South Corporation on June 17, 1982; and WHEREAS, the Company now desires to amend the Plan pursuant to Section 4.8 thereof; NOW, THEREFORE, the Plan is hereby amended as follows: 1. Section 1.4(a) of the Plan is hereby amended by deleting paragraph (5) thereof in its entirety and substituting the following in lieu thereof: "(5) To determine whether any Grantee of a Supplemental Stock Option shall be entitled to a Tax Equalization Payment. If the Committee, in its sole discretion, determines that such a payment should be made, the following conditions shall apply: (A) The amount of the Tax Equalization Payment shall be a percentage of the amount the Grantee includes in income (as described below) as a result of the exercise of a Supplemental Stock Option granted under the terms of this Plan. This percentage shall be determined by the Committee and shall reflect (i) the individual income tax rate that will apply to the amount the Grantee includes in income, (ii) the corporate income tax rate for the year the option is exercised, and (iii) the relationship between such individual income tax rate and corporate income tax rate; (B) For purposes hereof, the amount the Grantee includes in income shall be determined by subtracting the aggregate price Grantee paid for the shares of Common Stock upon exercise of the Option from the aggregate Fair Market Value of such shares of Common Stock on the date of exercise." 2. The foregoing amendment to the Plan shall be effective as of January 1, 1987. Except as herein amended, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, the Corporation has caused this Amendment to be executed by its duly authorized officers the day and year first above written. (CORPORATE SEAL) BANK SOUTH CORPORATION By: Attest AMENDMENT NO. 1 TO THE BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN THIS AMENDMENT, made this 19th day of February, 1987 by Bank South Corporation, a corporation organized under the laws of the State of Georgia (hereinafter together with the subsidiaries collectively referred to as the "Company"): W I T N E S S E H: WHEREAS, the Company established the Bank South Corporation Key Employee Stock Option Plan (the "Plan"), which was approved by the Board of Directors of Bank South Corporation on June 17, 1982; and WHEREAS, the Company now desires to amend the Plan pursuant to Section 4.8 thereof; NOW THEREFORE, the Plan is hereby amended as follows: 1. Section 1.2 of the Plan is hereby amended by the addition of the following new paragraph (r) at the end of the present provision: "(r) "Tax Equalization Payment" means a cash payment which may be payable to Grantee under the terms of Section 1.4(a)(5) upon exercise of a Supplemental Stock Option which is granted on or after January 1, 1987 under this Plan." 2. Section 1.3(a) of the Plan is hereby amended by deleting the present section in its entirety and substituting the following in lieu thereof; "Aggregate Limitation (a) The aggregate number of shares of Common Stock with respect to which Options and Stock Appreciation Rights may be granted shall not exceed 1,928,125 shares of Common Stock, subject to possible adjustments in accordance with Section 4.1" 3. Section 1.4(a) of the Plan is hereby amended by the addition of the following new paragraph (5) at the end of the present provision: "(5) To determine whether any Grantee of a Supplemental Stock Option shall be entitled to a Tax Equalization Payment. If the Committee, in its sole discretion, determines that such a payment should be paid, the following conditions shall apply: (A) The amount of the Tax Equalization Payment shall be equal to 28% of the appreciated value of the shares of Common Stock acquired upon exercise of a Supplemental Stock Option granted under the terms of this Plan, (B) For purposes hereof, the appreciated value shall be determined by subtracting the aggregate price Grantee paid for the shares of Common Stock upon exercise of the Option from the aggregate Fair Market Value of such shares of Common Stock on the date of exercise." 4. Section 2.2(c) of the Plan is hereby amended by deleting the present section in its entirety and substituting the following in lieu thereof; "(c)(1) An Option shall not be exercisable during the first twelve months commencing on the Grant Date (a) except as may be specifically allowed by the Committee in the event of a merger, acquisition or other extraordinary transaction in which Bank South Corporation is not the surviving entity, (b) in the event of a Change in Control (as hereinafter defined), or (c) in the event the Committee in its sole discretion, otherwise determines and specifies in the applicable Option Agreement that the Option is exercisable during the first twelve months following its Grant Date, as used herein. (2) "Change in Control" means (A) the acquisition, directly or indirectly, by any "person" (as such term is used in the Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) within any twelve month period, of securities of Bank South Corporation representing an aggregate of 25% or more of the combined voting power of Bank South Corporation's then outstanding securities, or (B) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors, cease for any reason to constitute at least a majority thereof, unless the election of each new director was approved in advance by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period." 5. Section 2.3(c) of the Plan is hereby amended by the addition of the following sentence at the end of the present provision: "This provision shall not apply to any Incentive Stock Option granted on or after January 1, 1987." 6. Section 2.3(d) of the Plan is hereby amended by the addition of the following new paragraph at the end of the present provision: "The immediately preceding paragraph of this Section 2.3(d) shall not apply to any Incentive Stock Option granted on or after January 1, 1987. With respect to such Incentive Stock Options, the following restriction shall apply: the aggregate Fair Market Value (determined on the Grant Date) of the shares of Common Stock with respect to which such Incentive Stock Options are exercisable for the first time by an employee during any calendar year (under all such plans of the employee's employer corporation and its parent and subsidiary corporations) shall not exceed $100,000." 7. The foregoing amendments to the Plan shall be effective as of January 1, 1987. Except as herein amended, the Plan shall remain in full force and effect. IN WITNESS WHEREOF, the Corporation has caused this Amendment to be executed by its duly authorized officers the day and year first above written. (CORPORATE SEAL) BANK SOUTH CORPORATION By: (Signature of Edward B. Grimball) Attest Senior Vice President and Secretary EX-99 4 EXHIBIT 99.2 SOUTHERN BANCORP, INC. 1986 INCENTIVE STOCK OPTION PLAN AND 1986 NONSTATUTORY STOCK OPTION PLAN SOUTHERN BANCORP, INC. 1986 INCENTIVE STOCK OPTION PLAN AND 1986 NONSTATUTORY STOCK OPTION PLAN I. Purpose (a) This Plan document is intended to implement and govern two separate Stock Option Plans of Southern Bancorp, Inc., a Georgia Corporation ("Company"), and its Parent Corporation or Subsidiary Corporation(s), if any: (i) The Southern Bancorp, Inc. 1986 Incentive Stock Option Plan ("Plan A"); and (ii) The Southern Bancorp, Inc. 1986 Nonstatutory Stock Option Plan ("Plan B"). Plan A provides for the granting of options that are intended to qualify as incentive stock options ("Incentive Stock Options") within the meaning of Section 422A(b) of the Internal Revenue Code. Plan B provides for the granting of options that are not intended to so qualify. Unless specified otherwise, all provisions of this Plan relate equally to both Plan A and Plan B, which Plans are condensed into one plan document solely for purposes of administrative convenience and are not intended to constitute tandem plans. (b) The purpose of these Plans is to further the interests of the Company by assisting the Company in retaining and developing strong management and inducing individuals to become and remain employees of the Company. The Plans are intended to accomplish this purpose by allowing the Company to grant options ("Options") to purchase shares of the Company's common stock ("Common Stock"). (For purposes of these Plans, "Parent Corporation" and "Subsidiary Corporation" shall mean corporations as defined in Sections 425(e) and 425(f), respectively, of the Internal Revenue Code. Additionally, "Company" shall include any Parent Corporation or Subsidiary Corporation that may exist.) 2. Administration (a) The Plans shall be administered by the Board of Directors or by a committee ("Committee") appointed by the Board and consisting of not less than three Board members who are not eligible to participate in either of these plans. (For purposes of this plan document, the term "Board" shall mean the Committee to the extent that the Board's powers have been delegated to the Committee.) (b) The Board shall have sole authority in its absolute discretion to (i) determine which officers and other key employees of the Company shall receive Options ("Optionees"), and (ii) subject to the express provisions of these Plans, to determine the time when Options shall be granted, the terms and conditions of Options other than those terms and conditions fixed under these Plans, and the number of shares which may be issued upon exercise of the Options. The Board shall adopt by resolution such rules and regulations as may be required to carry out the purposes of the Plans and shall have authority to do everything necessary or appropriate to administer the Plans. All decisions, determinations and interpretations of the Board shall be final and binding on all Optionees. Administration of the Plans with respect to members of the Committee shall not be delegated, but shall at all times remain vested in the Board. The Board may from time to time remove members from, or add members to , the Committee and vacancies on the Committee shall be filled by the Board. Furthermore, the Board at any time by resolution may abolish the Committee and revest in the Board the administration of the Plans. (c) With respect to Options granted to a key employee who is also a member of the Board, the Board shall take actions by a vote sufficient without counting the vote of such member of the Board, although such member of the Board may be counted in determining the presence of a quorum at a meeting of the Board which authorizes the granting of Options to such member of the Board. (d) The Committee, if appointed pursuant to this Section 2, shall report to the Board the name of employees granted Options, the number of shares covered by each Option and the terms and conditions of each such Option. 3. Eligibility Persons who shall be eligible to receive Options under these Plans shall be employees of the Company who render those types of services which tend to contribute materially to the success of the Company. The determination as to whether an officer or other key employee is eligible to receive Options hereunder shall be made by the Board in its sole discretion, and the decision of the Board shall be binding and final. 4. Number of Shares The maximum aggregate number of shares which may be optioned and sold under these Plans is 30,000 shares of authorized but unissued Common Stock of the Company. In the event that Options granted under the Plans shall terminate or expire without being exercised, in whole or in part, the shares subject to such unexercised Options shall again become available for the granting of an Option under these Plans. 5. Option Price (a) Plan A. The option price ("Option Price") for shares of Common Stock to be issued under Plan A shall be equal to or greater than the fair market value of such shares on the date on which the Option covering such shares is granted, except that if on the date on which such Option is granted the Optionee is a Restricted Shareholder, then such Option Price shall be equal to or greater than one hundred ten percent (110%) of the fair market value of the shares on the date such Option is granted. For the purposes of Plan A, a "Restricted Shareholder" is an individual who, at the time an Option is granted under Plan A, owns stock possessing more than ten percent (10%) of the total combined vesting power of all classes of stock of the Company, with stock ownership to be determined in light of the attribution rules set forth in Section 425(d) of the Internal Revenue Code. The fair market value of shares of Common Stock for all purposes of Plan A shall be determined by the Board in its sole discretion, exercised in good faith. 2 (b) Plan B. The Option Price for shares of Common Stock to be issued under Plan B shall be determined by the Board in its sole discretion, but in no event shall such Option Price be less than eighty-five percent (85%) of the fair market value of such shares on the date on which the Option covering such shares is granted. The fair market value of shares of Common Stock for all purposes of Plan B shall be determined by the Board in its sole discretion, exercised in good faith. 6. Term of the Plans The Plans shall be effective as of May 29, 1986, and shall continue in effect until May 29, 1996 unless terminated earlier. No Option may be granted hereunder after May 29, 1996. 7. Exercise of Options Subject to the limitations set forth herein and/or in any applicable Stock Option Agreement entered into hereunder, Options granted under these Plans shall be exercisable in accordance with the following rules: (a) General. Subject to the other provisions of this Section 7, Options shall vest and become exercisable at such times and in such installments as the Board shall provide in each individual Stock Option Agreement. Notwithstanding the foregoing, the Board may in its sole discretion, accelerate the time at which an Option or installment thereof may be exercised. (b) Termination of Options. All installments of an Option shall expire and terminate on such date as the Board shall determine, but in no event later than ten (10) years from the date such Option was granted (except that an Option granted under Plan A to a Restricted Shareholder shall by its terms not be exercisable after the expiration of five (5) years from the date provided otherwise in this Section 7 or in the Stock Option Agreement pursuant to which an Option is granted, an Option shall vest and may be exercised as provided in such Stock Option Agreement and at any time thereafter until, and including, the day before the Option Termination Date. (c) Sale or Reorganization. (i) Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company goes out of existence or becomes a subsidiary of another corporation, or upon a sale of substantially all the property or more than twenty-five percent (25%) of the then outstanding stock of the Company to another corporation, an Option shall become immediately exercisable with respect to the full number of shares subject to that Option during the period commencing as of the date an agreement providing for such transaction is executed and ending as of the earlier of: (A) The applicable expiration date for such Option as provided for in the Stock Option Agreement; or (B) The date on which the disposition of assets or stock contemplated by any such agreement is consummated. 3 (ii) Upon the consummation of any transaction specified in Section 7(c) (i) above, these Plans and any unexercised Options issued hereunder (or any unexercised portion thereof) shall terminate and cease to be effective, unless provision is made in connection with such transaction for assumption of Options previously granted or the substitution for such Options of new options covering the securities of a successor corporation or an affiliate thereof, with appropriate adjustments as to the number and kind of securities and prices. Any change or adjustment made pursuant to the terms of this Section 7(c) (ii) shall be made in such a manner so as not to constitute a "modification" as defined in Section 425(h) of the Internal Revenue Code and so as not to cause any Incentive Stock Option issued under Plan A to fail to continue to qualify as an Incentive Stock Option as defined in Section 422A(b) of the Internal Revenue Code. (d) Termination of Employment Other Than by Death or Disability (i) In the event that the employment of an Optionee with the Company is terminated for any reason other than retirement, death or permanent and total disability, any installments under the Option which have not accrued as of such Optionee's termination date shall expire and become unexercisable as of such termination date. All vested and exercisable options as of such Optionee's termination date shall not be exercisable after the effective date of the Optionee's termination of employment. A leave of absence approved in writing by the Board shall not be deemed a termination of employment for purposes of this Section 7(d) (i), but no Option may be exercised during any such leave of absence except during the first thirty (30) days thereof. (ii) In the event that the employment of an Optionee with the Company is terminated by reason of such Optionee's retirement, any installments under the Option which have not accrued as of such Optionee's retirement date shall expire and become unexcercisable as of such retirement date. All vested and excerisable Options granted under Plan A as of such Optionee's retirement date shall remain excercisable for a period not to exceed twelve (12) months following such retirement date, or for such longer period as determined appropriate by the Board, but not to exceed the option termination date. All vested and exercisable Options granted under Plan B as of such Optionee's retirement date shall remain exercisable for a period not to exceed twelve (12) months following such retirement date. (e) Death or Disability of Optionee While Employed (i) In the event that the employment of an Optionee with the Company is terminated by reason of such Optionee's permanent and total disability, any installments under the Option which have not accrued as of the date of such Optionee's termination of employment by reason of permanent and total disability shall expire and become unexercisable as of such termination date. All vested and exercisable Options granted hereunder to such Optionee shall expire and become unexercisable as of the earlier of: (A) The applicable Option Termination Date; or (B) The date which is twelve (12) months from the date of such Optionee's termination of employment by reason of permanent and total disability or for such longer period as determined by the Board. For purposes 4 of these Plans, the term "permanent and total disability" shall be defined under Internal Revenue Code Section 105(d) (4). (ii) In the event that the employment of an Optionee with the Company is terminated by reason of such Optionee's death, any Options which have not vested as of the date of such Optionee's termination of employment by reason of death shall expire and become unexercisable as of such date of death. All vested and exercisable options granted hereunder to such Optionee shall expire and become unexercisable as of the earlier of: (A) The applicable Option Termination Date; or (B) The first anniversary of the date of such Optionee's termination of employment by reason of death or for such longer period as determined by the Board. Any such vested option of a deceased Optionee may be exercised prior to their expiration only by the person or persons to whom such Optionee's Option rights pass by will or by the laws of descent and distribution. (f) Exercise of Options (i) An Option may be exercised in accordance with this Section 7 as to all vested Options from time to time during the applicable option period, except that an Option shall not be exercisable with respect to fractions of a share. (ii) As a condition to the exercise of an Option, the Board may in its sole discretion, require the Optionee to pay, in addition to the purchase price of the shares covered by the Option, an amount equal to any federal, state and local taxes that may be required to be withheld in connection with the exercise of such Option. (g) Sequential Exercise Rule. Notwithstanding any other provision of these Plans, an Option granted under Plan A as an Incentive Stock Option shall not be exercisable while there is outstanding (within the meaning of Section 422A(c) (7) of the Internal Revenue Code) any Incentive Stock Option which was granted, before the granting of the Option, to the Optionee to purchase stock in his employer corporation or in a corporation which (at the time of the granting of the Option) was a Parent Corporation or Subsidiary Corporation of the employer corporation, or in a predecessor corporation of any such corporations. For purposes of this Section, an Incentive Stock Option that is exercisable in installments over a period of years is outstanding until either the exercise or expiration of all installments. (h) Payment. The entire Option Price shall be paid in cash at the time the Option is exercised; provided, however, that an Optionee may elect to pay for all or some of his Option shares with shares of Common Stock of the Company previously acquired and owned at the time of exercise by the Optionee, subject to all restrictions and limitations of applicable law. An Optionee's right to use Company shares to exercise an Option is expressly conditioned upon his making representations and warranties satisfactory to the Company regarding his title to the shares used to exercise such Option. The equivalent dollar value of the shares used to effect the purchase shall be the fair market value of the shares as determined by the Board. 8. Shareholder Approval The Options granted under the Plans are conditioned on approval of the Plans by the stockholders of the Company as required by applicable law and/or the Company's Certificate of Incorporation and Bylaws within twelve months. 5 after approval of the Plans by the Board. No Option granted hereunder shall be exercisable (or otherwise vest any rights thereunder in the Optionees) unless and until the Plans have been so approved. 9. Limit on Value and Number of Optioned Shares The aggregate fair market value (determined as of the date the Option is granted) of the shares of Common Stock with respect to which any employee may be granted Incentive Stock Options in any calendar year under all incentive stock option plans of the Company shall not exceed One Hundred Thousand Dollars ($100,000.00) plus any Unused Limit Carryover to such year. For the purposes of this Section 9, "Unused Limit Carryover" means the amount defined by Section 422A(c) (4) of the Internal Revenue Code. The limitation imposed by this Section 9 shall not apply with respect to nonstatutory stock options granted under Plan B. 10. Stock Option Agreement The terms and conditions of Options granted under the Plans shall be evidenced by a Stock Option Agreement executed by the Company and the person to whom the Option is granted. Each Stock Option Agreement shall incorporate these Plans by reference and shall include such provisions as are determined to be necessary or appropriate by the Board. 11. Stock Restriction Agreement As a condition to the granting of any Option hereunder and the subsequent exercise of any such Option, the Board may require the Optionee to enter into a stock restriction agreement with the Company for the purpose of limiting the sale or other transfer of ownership of Common Stock acquired by the Optionee. 12. Amendment or Termination of the Plans (a) The Board may amend, suspend and/or terminate the Plans at any time; provided, however, that except as provided in Section 15 below, the Board shall not amend the Plans in the following respects without shareholder approval: (i) To increase the maximum number of shares subject to the Plans; (ii) To change the designation or class of persons eligible to receive Options under the Plans; (iii) To extend the term of the Plans or the maximum Option exercise period; or (iv) To decrease the minimum price at which shares may be optioned under the Plans. (b) Furthermore, the Plans may not, without the approval of the shareholders, be amended in any manner that would cause Incentive Stock Options issued hereunder to fail to qualify as Incentive Stock Options as defined in Section 422A(b) of the Internal Revenue Code. Notwithstanding the foregoing, no amendment, suspension or termination of the Plans shall adversely affect Options granted on or prior to the date thereof, as evidenced by the execution of a Stock Option Agreement by both the Company and the Optionee, without the consent of such Optionee. 6 13. Options Not Transferable Options granted under these Plans may not be sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise transferred or alienated in any manner, either voluntarily or involuntarily by operation of law, other than by will or the laws of descent and distribution, and may be exercised during the lifetime of an Optionee only by such Optionee or, if such Optionee shall become legally incompetent or disabled, by such Optionee's guardian or legal representative. 14. Restrictions on Issuance of Shares (a) Subject to the limitations set forth hereinbelow, the Company shall have the following registration, qualification and stock exchange approval obligations: (i) In the event that the Company shall deem it necessary to register the Plans and/or the shares of Common Stock and/or the Options under the Securities Act of 1933 or other applicable statutes any shares of Common Stock with respect to which an Option shall have been exercised, or to qualify any such shares for exemption from such registration requirements, then the Company shall take such action at its own expense before delivery of such shares; and/or (ii) In the event the shares of stock of the Company shall be listed on any national stock exchange at the time of the exercise of an Option under the Plans, then the Company shall make prompt application for such stock exchange's approval of the listing of such shares on such stock exchange, at the sole expense of the Company. (b) In no event shall the Company be obligated to agree to any conditions which it deems unacceptable as a prerequisite to obtaining such registration, qualification and/or stock exchange approval. The inability of the Company to obtain from any regulatory agency and/or stock exchange the authorization deemed by the Company's counsel to be necessary to the lawful issuance and sale of any shares of its stock hereunder shall relieve the Company of any liability in respect of the non-issuance or sale of such stock as to which such requisite authorization shall not have been obtained. (c) Options granted under the Plans shall be conditioned upon the Company obtaining any required regulatory permit authorizing the Company to issue such Options. 15. Adjustments Upon Changes in Capitalization If the outstanding shares of Common Stock of the Company are increased, decreased, changed into or exchanged for a different number or kind of shares of the Company through reorganization, recapitalization, reclassification, stock dividend, stock split or reverse stock split, upon proper authorization of the Board an appropriate and proportionate adjustment shall be made in the number or kind of shares, and the per-share option price thereof, which may be issued in the aggregate and to individual Optionees under these Plans upon exercise of Options granted under the Plans; provided, however, that no such adjustment need be made if, upon the advice of counsel, the Board determines that such adjustment may result in the receipt of federally taxable income to holders of Options granted hereunder or the holders of Common Stock or other classes of the Company's securities. 7 16. Representations and Warranties As a condition to the granting and the exercise of any portion of an Option, the Company may require the person receiving or exercising such Option to make any representation and/or warranty to the Company as may, in the judgment of counsel to the Company, be required under any applicable law or regulation, including but not limited to a representation and warranty that the Option and/or shares are being acquired only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required under the Securities Act of 1933 or any other applicable law, regulation or rule of any governmental agency. 17. No Enlargement of Employee Rights These Plans are purely voluntary on the part of the Company, and while the Company hopes to continue them indefinitely, the continuance of the Plans shall not be deemed to constitute a contract between the Company and any employee, or to be consideration for or a condition of the employment of any employee. Nothing contained in the Plans shall be deemed to give any employee the right to be retained in the employ of the Company or to interfere with the right of the Company to discharge or retire any employee thereof at any time. No employee shall have the right to or interest in Options authorized hereunder prior to the grant of such an Option to such employee, and upon such grant he shall have only such rights and interests as are expressly provided herein, subject, however, to all applicable provisions of the Company's Certificate of Incorporation and Bylaws, as the same may be amended from time to time. 18. Privileges of Stock Ownership No person entitled to exercise any Option granted under the Plans shall have any of the rights or privileges of a stockholder of the Company in respect of any shares of Common Stock issuable upon exercise of such Option until a certificate representing such shares shall have been issued. No adjustments shall be made for dividends or other rights for which the record date is prior to the date of issuance of such certificate, except as provided in Section 15. 19. Legends on Options and Stock Certificates Each Stock Option Agreement and each certificate representing shares of Common Stock acquired upon exercise of an Option shall be endorsed with all legends, if any, required by applicable securities laws to be placed on the Stock Option Agreement and/or certificate. 20. Availability of Plans A copy of these Plans shall be delivered to the Secretary of the Company and shall be shown by the Secretary to any eligible person making reasonable inquiry concerning the Plans. 21. Applicable Law These Plans shall be governed by and construed in accordance with the laws of the State of Georgia. 8 IN WITNESS WHEREOF, pursuant to the due authorization and adoption of these Plans by the Board on May 29, 1986, the Company has caused these Plans to be duly executed by its duly authorized officers, effective as of the date of such Board adoption. SOUTHERN BANCORP, INC. BY: ---------------------------------- President ATTEST: ------------------------------ Secretary 9 EX-99 5 EXHIBIT 99.3 MATERIAL PROVISIONS OF THE HERITAGE BANCSHARES, INC. EMPLOYEES' NON-QUALIFIED STOCK OPTION PLAN General The Non-Qualified Plan was adopted by the Board of Directors of Heritage on October 15, 1986, and approved by a majority vote of its shareholders at Heritage's annual meeting in March, 1987. The Incentive Plan was adopted by the Board of Directors of Heritage on November 10, 1983 as amended and restated on October 15, 1986, and approved by a majority vote of its shareholders at Heritage's annual meeting in March, 1987. The purposes of the Plans were to secure to Heritage and its shareholders the advantages of the incentive inherent in stock ownership by its employees and to provide them with a proprietary interest in and a greater concern for the welfare of Heritage and an incentive to continue their employment with Heritage. In conjunction with the acquisition of Heritage, the Company agreed to assume the outstanding options granted pursuant to the Plans in order to maintain these advantages of ownership by the employees. Pursuant to Section 3.12 of the Acquisition Agreement, the Plans were terminated and the Company assumed the rights and obligations of Heritage under each then existing and outstanding option to purchase shares of Heritage granted pursuant to such Plans ("Existing Options"). As a result of the assumption by the Company of the Existing Options, each holder of an Existing Option is entitled to acquire the largest whole number of shares of Common Stock determined by multiplying the number of shares of common stock of Heritage covered by each Existing Option existing immediately prior to the closing of the merger by 2.921 (the merger exchange ratio) at a price per share equal to the price per share then specified in such Existing Option divided by 2.921. The number of shares and option prices are both subject to appropriate adjustment in the event of any stock dividend, split up or other recapitalization. The Existing Options assumed by the Company and for which options to purchase Company Common Stock have been substituted (the "Options") were issued pursuant to the -7- Incentive Plan and the Non-qualified Plan. The Incentive Plan provided for the granting of options intended to qualify as incentive stock options ("Incentive Options") within the meaning of Internal Revenue Code (Section Symbol) 422(A) (b). The Non-qualified Plan provided for the granting of options not intended to so qualify ("Non-qualified Options"). Unless specified otherwise, the description in this Prospectus relates to both the Incentive and the Non- qualified Plan. A maximum of 360,762 shares of the Company's Common Stock (subject to adjustment for stock dividends or other recapitalizations) are available for issue upon the exercise of the options and no additional options will be granted pursuant to the Plans. The shares will be issued out of authorized and unissued shares of Common Stock of the Company or transferred from available treasury stock. The Plans are not subject to any provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), nor is it subject to Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"). A summary of the more important provisions of the Plans is set forth below. This summary does not purport to be complete and reference to the full text of the Plans should be made for further information. Copies of the Plans will be made available to holders of options under the Plans upon written request addressed to Edward B. Grimball, Corporate Secretary, Bank South Corporation, 55 Marietta Street, N.W., Atlanta, Georgia 30303. Administration Pursuant to the Acquisition Agreement, the Company has assumed the responsibility for administering the Plans. The Plans are administered by the Compensation Committee of the Board of Directors of the Company (the "Committee"). The Committee is bound to follow the terms and conditions of each of the Plans. The members of the Committee are appointed by and serve at the pleasure of the Board of Directors of the Company. All decisions and determinations of the Committee in the administration of the Plan and on all questions concerning the Plan are final and conclusive. The present members of the Committee and their positions with the Company and addresses are: -8- Name Position Address Rawson Haverty, Director Haverty Furniture Chairman Companies, Inc. P.O. Box 54678 Civic Center Station Atlanta, Georgia 30308 Lynn H. Johnston Director Life Insurance Company of Georgia Life of Georgia Corporate Center P.O. Box 105006 Atlanta, Georgia 30348-5006 Gene W. Milner Director The Milner Companies 3333 Peachtree Street Suite 310 East Tower Atlanta, Georgia 30328 Eligibility and Participation Employees of Heritage and each of its subsidiaries (corporations at least 50% of the voting capital stock of which was owned directly or indirectly by Heritage and subsidiaries of such corporations) were eligible for grants of options under the Plans. Recipients under the Plans were selected in the discretion of the committee administering the Plan (the "Heritage Committee"), taking into account such factors as the nature of services rendered by the employee, the employee's potential contribution to the long- term success of the Company and such other factors as the committee deemed relevant. On November 19, 1987, a total of 11 employees were participating in the Non-Qualified Plan and 3 employees were participating in the Incentive Plan. Because the Plans were terminated pursuant to the Acquisi- tion Agreement, no additional options will be granted pursuant to the Plans. Terms of Grant and Exercise of Stock Options The Plans provide for both incentive stock options ("Incentive Options"), as defined in Section 422A of the Code, and nonqualified options ("Nonqualified Options"). The Heritage Committee determined the type of option granted. The following information relates to both types of options unless otherwise specified. -9- General. All options were granted in quantities determined at the discretion of the Heritage Committee. Full payment of the option price has to be made when an option is exercised. The purchase price may be paid in cash or in such other form as the Committee may approve, including shares of Common Stock valued at their fair market value on the date of exercise. The proceeds received by the Company from the sales of the shares under the Plans will be used for general corporate purposes. Options granted under the Plans will be exer- cisable, in whole or in part, by the option holder upon such terms and conditions as may be determined by the Committee; provided that options will not be exercisable later than 10 years from the date of grant, except in the case of certain Incentive Options. See "Additional Requirements for Incen- tive Options." Options may be exercised only while the option holder is an employee of the Company or one of its subsi- diaries or during one of the following periods: (i) the three month period following the date on which option holder ceases to be an employee of the company if the option holder's employment with the company was terminated other than voluntarily or for cause as defined in the Plan; (ii) the three month period following retirement under any retirement plan of the Company; and (iii) the one year period following the date on which the option holder ceases to be an employee of the Company if the option holder has a total and permanent disability. Provided, however, that options may be exercised during such periods only if the remaining term for exercise includes such periods. Additional Requirements for Incentive Options. The Incentive Plan established additional terms for Incentive Options which, if the conditions are met, will qualify for favorable tax treatment under Section 422A of the Code. See "Description of the Stock Option Plan - Federal Income Tax Effects." For Incentive Options granted prior to January 1, 1987, an option holder may exercise his or her Incentive Options only in the order in which granted and the aggregate Fair Market Value of Common Stock subject to such options granted in any calendar year may not exceed $100,000 (or such larger amount as may be permitted under applicable law). Further, if an Incentive Option was granted to an employee of the Company who owns 10 percent or more of the combined voting power of all shares of stock of the Company, the option price per share must be at least 110 percent of -10- the Fair Market Value of a share of Common Stock on the date of grant and the option may be exercisable for only five years. Assignment of Interest Holders of options may not sell, assign, transfer or hypothecate their rights thereunder to any person, except in the event of the death of the holder in which case the rights granted may be transferred by will or by the laws of descent and distribution. To the extent permitted by law, a holder's rights shall not be subject to liens or claims against him. Voting of Stock A holder of an option will have no voting or other rights in any shares of the Common Stock that are subject to the option until such shares have been issued and delivered to the holder pursuant to the exercise of such option. Neither will the grant of any right pursuant to either of the Plans confer upon any recipient thereof any rights of employment with the Company or affect the right of the Com- pany to terminate the employment of the holder at any time. Adjustment of Shares The Committee may in its discretion adjust the number of shares subject to stock options under the Plans, the purchase price per share and the aggregate number of shares available for issue under the Plans in the event of any stock dividend issued by the Company, recapitalization of the Company's capital structure or exchange of the out- standing shares of Common Stock for shares of another class or company. Outstanding Stock Options The following outstanding options were issued pursuant to the Incentive Plan on the date and for the price stated below. Original Converted Heritage Common Stock Amounts Company Common Stock Amounts Number of Number of Date Shares Option Price Shares Option Price March 14, 1984 3,000 $30.00 8,763 $10.27 -11- The following outstanding options were issued pursuant to the Non-Qualified Plan on the date and for the price stated below.
Original Converted Heritage Common Stock Amounts Company Common Stock Amounts Number of Number of Date Shares Option Price Shares Option Price March 14, 1984 6,666 $ 33.00 19,472 $ 11.30 March 14, 1984 43,000 $ 14.00 125,603 $ 4.79 October 15, 1986 31,920 $ 30.00 93,238 $ 10.27 October 15, 1986 32,920 $ 32.50 96,160 $ 11.13 April 15, 1987 6,000 $ 35.00 17,526 $ 11.98 8,763 ------ 360,762
Expenses The Company pays the administrative costs of the Plans, including the expenses of the Committee, all costs of registering the shares of Common Stock under the Plans with the Securities and Exchange Commission, and issuing and delivering the shares subject to the Plans. Federal Income Tax Effects Nonqualified Options. An Optionee did not realize taxable income when a Nonqualified Option was granted to him. Upon the exercise of a Nonqualified Option, however, the Optionee will recognize income to the extent that the fair market value of the Common Stock on the date the Nonqualified Option is exercised exceeds the option price. Any such gain is taxed in the same manner as ordinary income in the year the Nonqualified Option is exercised. Any gain recognized upon the disposition of the shares of stock obtained by exercise of a Nonqualified Option will be taxed in the same manner as capital gain income. The capital gain tax rates are currently the same as the ordinary income tax rates. The Company did not experience any tax consequences upon the grant of a Nonqualified Option, but will be entitled to take an income tax deduction equal to the amount the Optionee includes in income (if any) when the Option is exercised. -12- Incentive Stock Options. An Optionee will not realize taxable income from the grant or exercise of an Incentive Stock Option. However, upon disposition of the shares of stock obtained through the exercise of an Incentive Stock Option, the Optionee will be taxed on the gain, if any, on the shares of stock. The amount of gain which the Optionee must recognize is equal to the amount by which the value of the common stock on the date of sale exceeds the option price. Any such gain will be taxed in the same manner as capital gain income. The capital gain tax rates are currently the same as the ordinary income tax rates. To qualify for the special tax treatment afforded Incentive Stock Options, the Optionee must hold the common stock obtained upon exercise of the Incentive Stock Option for at least two years from the date the option was granted. If the Optionee sells the stock before the two year holding period expires, the Optionee must recognize income equal to the lesser of the amount by which the fair market value of the stock exceeds the Option price, or the amount by which the amount realized on the disposition exceeds the Option price. The Optionee must hold the common stock obtained upon the exercise of the Incentive Stock Option for at least one year in order for the recognized gain to be taxed in the same manner as capital gain income. If the Optionee holds the Common Stock for at least two years from the date of exercise of the option, the Company will not be entitled to any income tax deduction as a result of the issuance of the shares pursuant to the exercise of an Incentive Stock Option. However, if the optionee sells the shares before the two-year holding period is met, the Company will be entitled to take an income tax deduction equal to the amount of income recognized by the Optionee as a result of the sale. Restrictions on Resale Persons who are not affiliates of the Company may resell stock acquired upon exercise of options issued under the Plans without compliance with the requirements of Rule 144. Resales of such stock by persons who may be considered "affiliates" of the Company, which may include directors and ten percent shareholders of the Company, may be sold only in compliance with all of the provisions of Rule 144 other than the two-year holding period requirement, or pursuant to a separate registration for the sale of such shares. In general, with respect to shares acquired by affiliates pur- suant to the Plans, under Rule 144 an affiliate (and persons -13- whose shares are aggregated with such affiliate) is entitled to sell within any three-month period a number of shares (including shares received other than pursuant to the Plan) that does not exceed the greater of one percent of the then outstanding shares of the Company's Common Stock (approxi- mately 241,130 shares based on outstanding shares at October 31, 1987) or the average weekly trading volume in the over- the-counter market during the four full calendar weeks preceding the sale. LEGAL MATTERS The validity of the shares of Common Stock offered hereby will be passed upon for the Company by Kilpatrick & Cody, Suite 3100, 100 Peachtree Street, Atlanta, Georgia 30043, counsel to the Company. Barry Phillips, a director of the Company, is a partner of Kilpatrick & Cody, and, as of November 18, 1987, partners and associates in that firm who worked on the registration statement for the shares offered hereby owned beneficially an aggregate of approxi- mately 12,062 shares of the Company's Common Stock. EXPERTS The financial statements of Bank South Corporation incorporated in this Prospectus and Registration Statement by reference to the Annual Report on Form lO-K of Bank South Corporation for the year ended December 31, 1986, have been so incorporated in reliance on the report of Price Waterhouse, independent accountants, given on the authority of said firm as experts in auditing and accounting. The consolidated financial statements of Bank South Corporation and subsidiaries for the two years ended December 31, 1985, which are incorporated by reference in this Prospectus and Registration Statement, have been examined by Ernst & Whinney, independent accountants, as indicated in their report thereon which is included in the Annual Report on Form lO-K for the year ended December 31, 1986, as amended. The consolidated financial statements examined by Ernst & Whinney, have been incorporated herein by reference in reliance on their report given upon their authority as experts in accounting and auditing. -14- EX-99 6 EXHIBIT 99.4 BANK SOUTH CORPORATION KEY EMPLOYEE STOCK OPTION PLAN (1992) Introduction The purpose of the Plan is to promote the long-term success of Bank South Corporation and its subsidiaries by providing financial incentives to key employees who are in positions to make significant contributions toward such success. The Plan is designed to attract individuals of outstanding ability to employment with Bank South Corporation and its subsidiaries, to encourage key employees to acquire a proprietary interest in Bank South Corporation and to continue their employment with Bank South Corporation or its subsidiaries, and to render superior performance during such employment. This Plan replaces the Company's Stock Option Plan (the "Prior Plan") which was established on June 17, 1982, and under which no options may be granted after June 16, 1992. This Plan shall become effective on June 17, 1992. The options granted under the Prior Plan shall remain subject to, and shall be exercisable in accordance with, the terms and conditions of the Prior Plan and the applicable Option Agreements. Any options granted under this Plan shall be subject solely to the provisions of this Plan. Table of Contents Page ARTICLE I Definitions; Maximum Shares Limitation; Administration; Eligibility 1 1.1 Definitions 1 1.2 Maximum Shares Limitation 6 1.3 Administration of the Plan 7 1.4 Eligibility for Awards 10 1.5 Effective Date and Duration of Plan 10 ARTICLE II Stock Options 11 2.1 Grant of Options 11 2.2 Option Requirements 11 2.3 Incentive Stock Option Requirements 14 ARTICLE III Stock Appreciation Rights 16 3.1 Grant of Stock Appreciation Rights 16 3.2 Stock Appreciation Rights Requirements 17 ARTICLE IV General Provisions 18 4.1 Adjustment Provisions 18 4.2 Additional Conditions 19 4.3 No Rights as Shareholder or to Employment 20 4.4 Legal Restrictions 20 4.5 Rights Unaffected 21 4.6 Withholding Taxes 22 4.7 Choice of Law 22 4.8 Amendment, Suspension and Termination of Plan 23 ARTICLE I DEFINITIONS; MAXIMUM SHARES LIMITATION; ADMINISTRATION; ELIGIBILITY 1.1 Definitions Unless the context clearly indicates otherwise, for purposes of this Plan the following terms have the respective meanings set forth below: (a) "Bank South Corporation" means Bank South Corporation, a Georgia corporation, and any successor thereto. (b) "Board of Directors" means the Board of Directors of Bank South Corporation. (c) "Change in Control" means: (1) the acquisition, directly or indirectly, by any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) within any twelve month period, of securities of Bank South Corporation representing an aggregate of 25% or more of the combined voting power of Bank South Corporation's then outstanding securities; or (2) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors, cease for any reason to constitute at least a majority thereof, unless the election of each new director was approved in advance by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period. The Committee may expand or restrict the events which constitute a "Change in Control" for purposes of all or a portion of the Options covered by a particular Option Agreement. (d) "Code" means the Internal Revenue Code of 1986, as amended. (e) "Committee" means the Compensation Committee of the Board of Directors, which Committee shall be composed of not less than three members of the Board of Directors who are not employees of Bank South Corporation or its affiliates and who are not, at the time they are exercising discretion in administering the Plan, eligible, and have not at any time within one year prior thereto been eligible, for selection as a person to whom Options or Stock Appreciation Rights may 2 be granted pursuant to this Plan or any other similar plan of Bank South Corporation or its affiliates. (f) "Common Stock" means the common stock of Bank South Corporation, par value $5.00 per share, or such other class of share or other securities to which the provisions of the Plan may be applicable by reason of the operation of Section 4.1 hereof. (g) "Company" means Bank South Corporation, and also means any corporation of which a majority of the voting capital stock is owned directly or indirectly by Bank South Corporation or any of its subsidiaries which is a Company hereunder, and any other corporation designated by the Committee as being a Company hereunder (but only during the period of such ownership or designation). (h) "Fair Market Value" of a share of Common Stock on any particular date means (1) if the Common Stock is not then traded on a national stock exchange, the mean between the closing composite inter-dealer "bid" and "ask" prices for Common Stock, as quoted by NASDAQ (i) on such date, or (ii) if no "bid" and "ask" prices are quoted on such date, then on the next preceding date on which such prices were quoted; or (2) if the Common Stock is then traded on a national stock exchange, the closing price on such date of a share of the Common 3 Stock as traded on the largest stock exchange on which it is then traded. (i) "Grant Date," as used with respect to a particular Option or Stock Appreciation Right, means the date as of which such Option or Stock Appreciation Right is granted by the Committee pursuant to the Plan. (j) "Grantee" means the key employee to whom an Option or Stock Appreciation Right is granted by the Committee pursuant to the Plan. (k) "Incentive Stock Option" means an Option that qualifies as an incentive stock option as described in Section 422 of the Code. (l) "Option" means an Option granted by the Committee pursuant to Article II to purchase shares of Common Stock, which shall be designated at the time of grant as either an Incentive Stock Option or a Supplemental Stock Option, as provided in Section 2.1 hereof. (m) "Option Agreement" means the agreement between Bank South Corporation and a Grantee under which the Grantee is granted an Option and/or Stock Appreciation Rights pursuant to the Plan. 4 (n) "Option Period" means, with respect to any Option or Stock Appreciation Right granted hereunder, the period beginning on the Grant Date and ending at such time not later than the tenth annual anniversary of the Grant Date, as the Committee, in its sole discretion, shall determine and during which the Option or Stock Appreciation Right may be exercised. (o) "Plan" means the Bank South Corporation Key Employee Stock Option Plan (1992), as set forth herein and as amended from time to time. (p) "Retirement," as applied to a Grantee, means the Grantee's termination of employment in a manner which qualifies the Grantee to receive immediately payable retirement benefits under the Bank South Corporation Employees' Retirement Plan and Trust, under the successor or replacement of such Retirement Plan if it is then no longer in effect, or under any other retirement plan maintained or adopted by Bank South Corporation which is determined by the Committee to be the functional equivalent of such Retirement Plan. (q) "Stock Appreciation Right" means a right granted pursuant to Article III hereof by the Committee, in conjunction with an Option, to receive payment equal to any increase in the Fair Market Value of a share of 5 Common Stock from the Grant Date to the date of exercise of such right, in lieu of exercise of the Option for such share. (r) "Supplemental Stock Option" means any Option granted under this Plan, other than an Incentive Stock Option. (s) "Tax Equalization Payment" means a cash payment which may be payable to a Grantee under the terms of Section 1.3(a) (4) upon exercise of a Supplemental Stock Option granted under this Plan. (t) "Total and Permanent Disability," as applied to a Grantee, means that the Grantee (1) has established to the satisfaction of the Committee that the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months and (2) has satisfied any requirement imposed by the Committee in regard to evidence of such Total and Permanent Disability. 1.2 Maximum Shares Limitation (a) The maximum number of shares of Common Stock with respect to which Options and Stock Appreciation Rights 6 may be granted under this Plan shall not exceed 335,779 shares of Common Stock, subject to possible adjustments in accordance with Section 4.1. (b) Any shares of Common Stock to be delivered by Bank South Corporation upon the exercise of Options or Stock Appreciation Rights shall, at the discretion of the Board of Directors, be issued from Bank South Corporation's authorized but unissued shares of Common Stock or be transferred from any available treasury stock. (c) In the event that any Option or Stock Appreciation Right expires or otherwise terminates prior to being fully exercised the Committee may grant new Options and Stock Appreciation Rights hereunder to any eligible Grantee for the shares with respect to which the expired or terminated Option or Stock Appreciation Rights were not exercised. 1.3 Administration of the Plan (a) The Plan shall be administered by the Committee which shall have the discretionary authority: (1) To determine those key employees of the Company to whom, and the times at which, Options and Stock 7 Appreciation Rights shall be granted and the number of shares of Common Stock to be subject to such Option and Stock Appreciation Rights, taking into consideration the nature of the services rendered (or to be rendered) by the particular employee, the employee's potential contribution to the long-term success of the Company, and such other factors as the Committee in its discretion shall deem relevant; (2) To interpret and construe the provisions of the Plan and to establish rules and regulations relating to it; (3) To prescribe the terms and conditions of the Option Agreements for the grant of Options and Stock Appreciation Rights (which need not be identical) in accordance and consistent with the requirements of the Plan; (4) To determine, in its sole discretion, whether any Grantee of a Supplemental Stock Option shall be entitled to a Tax Equalization Payment. The amount of the Tax Equalization Payment shall be a percentage of the amount the Grantee includes in income (as described below) as a result of the exercise of a Supplemental Stock Option granted 8 under the terms of this Plan. This percentage shall be determined by the Committee and shall reflect (i) the individual income tax rate that will apply to the amount the Grantee includes in income, (ii) the corporate income tax rate for the year the option is exercised, and (iii) the relationship between such individual income tax rate and corporate income tax rate. For purposes hereof, the amount the Grantee includes in income shall be determined by subtracting the aggregate price Grantee paid for the shares of Common Stock upon exercise of the Option from the aggregate Fair Market Value of such shares of Common Stock on the date of the exercise; and (5) To make all other determinations necessary or advisable to administer the Plan in a proper and effective manner. (b) All decisions and determinations of the Committee in the administration of the Plan and on questions or other matters concerning the Plan or any Option or Stock Appreciation Right shall be final, conclusive and binding on all persons, including, without limitation, Bank South Corporation, the Company, the shareholders and directors of Bank South Corporation and any persons having any interest in any Options or Stock 9 Appreciation Rights which may be granted under the Plan. The Committee shall be entitled to rely in reaching its decisions on the advice of counsel (who may be counsel to Bank South Corporation). 1.4 Eligibility for Awards The Committee shall in accordance with Article II and III designate from time to time the key employees of the Company who are to be granted Options and Stock Appreciation Rights. In no event may a member of the Committee or any Director who is not an employee of the Company be granted an Option or Stock Appreciation Right under this Plan. 1.5 Effective Date and Duration of Plan The Plan shall become effective on June 17, 1992; provided, that any grant of Options or Stock Appreciation Rights under the Plan prior to approval of the Plan by the shareholders of Bank South Corporation is subject to such shareholder approval within twelve months of adoption of the Plan by the Board of Directors. Unless previously terminated by the Board of Directors, the Plan (but not any then outstanding Options or Stock Appreciation Rights which have not yet expired or otherwise terminated) shall terminate on the fifth (5th) annual anniversary of its adoption by the Board of Directors. 10 ARTICLE II STOCK OPTIONS 2.1 Grant of Options The Committee may from time to time, subject to the provisions of the Plan, grant Options to key employees of the Company under appropriate Option Agreements to purchase shares of Common Stock up to the maximum number of shares of Common Stock set forth in Section 1.2(a). The Committee may designate any Option (or portion thereof) which satisfies the requirements of Section 2.3 hereof as an Incentive Stock Option. Any portion of an Option that is not designated as an Incentive Stock Option (or that otherwise fails to be treated as an Incentive Stock Option) shall be a Supplemental Stock Option. A Supplemental Stock Option must satisfy the requirements of Section 2.2 hereof, but shall not be subject to the requirements of Section 2.3. 2.2 Option Requirements (a) An Option shall be evidenced by an Option Agreement specifying the number of shares of Common Stock that may be purchased by its exercise and containing such other terms and conditions consistent with the Plan as the Committee shall determine to be applicable to that particular Option. 11 (b) No Option shall be granted under the Plan on or after the fifth (5th) annual anniversary of the date upon which the Plan became effective. (c) No Option shall be exercisable during the first twelve months commencing on the Grant Date (A) except as may be specifically allowed by the Committee in the event of a merger, acquisition or other extraordinary transaction in which Bank South Corporation is not the surviving entity, (B) in the event of a Change in Control (as defined in Section 1.1(c)), or (C) in the event the Committee in its sole discretion, otherwise determines and specifies in the applicable Option Agreement that the Option is exercisable during the first twelve months following its Grant Date. (d) An Option shall expire by its terms at the expiration of the Option Period and shall not be exercisable thereafter. The Committee may provide in the Option Agreement for the expiration or termination of the Option prior to the expiration of the Option Period, upon the occurrence of any event specified by the Committee. (e) The option price per share of Common Stock shall be not less than the Fair Market Value of a share of Common Stock on the Grant Date. 12 (f) An Option shall not be transferrable other than by will or the laws of descent and distribution. During the lifetime of the Grantee, an Option shall be exercisable only by the Grantee, or if the Grantee is disabled, by his duly appointed guardian or legal representative. Upon his death, but only to the extent that such Option is otherwise exercisable hereunder, an Option my be exercised by the Grantee's legal representative or by a person who receives the right to exercise such Option under the Grantee's will or by the applicable laws of descent and distribution. (g) Notwithstanding the Option Period applicable to an Option granted hereunder and except as otherwise provided in the Option Agreement, such Option, to the extent that it has not previously been exercised, shall terminate upon the earliest to occur of: (1) the expiration of the applicable Option Period as set forth in the Option Agreement granting such Option, (2) the expiration of three months after the Grantee's Retirement, (3) the expiration of one year after the Grantee ceases to be an employee of the Company due to Total and Permanent Disability, (4) the expiration of two years after the Grantee ceases to be an employee of the Company due to the death of the Grantee or such later time as may be approved by the Committee, or (5) 13 the date that a Grantee terminates employment with the Company for any reason other than Retirement, Total and Permanent Disability, or death. (h) A person electing to exercise an Option shall give written notice of such election to Bank South Corporation, in such form as the Committee may require, accompanied by payment in the manner determined by the Committee, of the full purchase price of the shares of Common Stock for which the election is made. Payment of the purchase price shall be made in cash or in such other form as the Committee amy approve, including shares of Common Stock valued at their Fair Market Value on the date of exercise of the Option. (i) The exercise of any number of Stock Appreciation Rights granted under an Option Agreement shall result in a simultaneous corresponding reduction in the number of shares of Common Stock then available for purchase by exercise of the related Option. 2.3 Incentive Stock Option Requirements (a) An Option designated by the Committee as an Incentive Stock Option is intended to qualify as an "incentive stock option" within the meaning of Section 422(b) of the Code, and shall satisfy, in addition to the 14 conditions of Section 2.2 above, the conditions set forth in this Section 2.3. (b) An Incentive Stock Option shall not be granted to an individual who, on the Grant Date, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, unless the Committee provides in the Option Agreement with any such individual that the option price per share of Common Stock will not be less than 110% of the Fair Market Value of a share of Common Stock on the Grant Date and that the Option Period will not extend beyond five years from the Grant Date. (c) The aggregate Fair Market Value (determined on the Grant Date) of the shares of Common Stock with respect to which such Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year (under all such plans maintained by Bank South Corporation or its affiliates) shall not exceed $100,000. 15 ARTICLE III STOCK APPRECIATION RIGHTS 3.1 Grant of Stock Appreciation Rights (a) In conjunction with any Option granted hereunder, the Committee may, in its discretion, grant a Stock Appreciation Right with respect to each share of Common Stock which may be purchased by the exercise of such Option. (b) Upon exercise of a Stock Appreciation Right, Bank South Corporation shall pay the amount by which the Fair Market Value of a share of Common Stock on the date of exercise exceeds the Fair Market Value of a share of Common Stock on the Grant Date, but only to the extent that such amount does not exceed 200% of the Fair Market Value of a share of Common Stock on the Grant Date. A Stock Appreciation Right may not be exercised unless the Fair Market Value of a share of Common Stock on the date of exercise exceeds the Fair Market Value of a share of Common Stock on the Grant Date. (c) Payment upon exercise of a Stock Appreciation Right may be made, in the sole discretion of the Committee, in (1) cash, (2) in shares of Common Stock valued at Fair Market Value on the date of exercise, or (3) partly in cash and partly in shares of Common Stock. 16 3.2 Stock Appreciation Rights Requirements (a) Stock Appreciation Rights shall be granted under and evidenced by the Option Agreement under which the related Option is granted, containing such terms and conditions consistent with the Plan as the Committee shall determine, and shall be exercisable to the extent allowed under such terms and conditions. (b) Stock Appreciation Rights granted in relation to an Option (1) shall be exercisable only to the extent and only when the Option is exercisable, (2) shall expire or otherwise terminate simultaneously with the expiration or termination of the related Option, (3) shall be transferable only when the related Option is transferable and under the same conditions, (4) shall be exercised by the Grantee giving written notice of such exercise to Bank South Corporation, in such form as the Committee may require, and (5) shall be reduced upon each exercise of the related Option by the number of Stock Appreciation Rights which corresponds to the number of shares of Common Stock purchased pursuant to such exercise. 17 ARTICLE IV GENERAL PROVISIONS 4.1 Adjustment Provisions (a) In the event of: (1) any dividend payable in shares of Common Stock, (2) any recapitalization, reclassification, split-up or consolidation of, or other change in, the Common Stock, or (3) an exchange of the outstanding shares of Common Stock, in connection with a merger, consolidation or other reorganization of or involving Bank South Corporation or a sale by Bank South Corporation of all or a portion of its assets, for a different number or class of shares of stock or other securities of Bank South Corporation or for shares of the stock or other securities of any other corporation, then the Committee shall, in such manner as it shall determine in its sole discretion, appropriately adjust the number and class of shares or other securities which shall be subject to Options and Stock 18 Appreciation Rights and/or the purchase price per share which must be paid thereafter upon exercise of any Option and which will be used to determine the amount which any Grantee would receive upon exercise thereafter of Stock Appreciation Rights. Any such adjustments made by the Committee shall be final, conclusive and binding upon all persons, including, without limitation, Bank South Corporation, the Company, the shareholders and directors of Bank South Corporation and any persons having any interest in any Options or Stock Appreciation Rights which may be granted under the Plan. (b) Except as provided in paragraph (a) immediately above, issuance by Bank South Corporation of shares of stock of any class or securities convertible into shares of stock of any class shall not affect the Options or Stock Appreciation Rights. 4.2 Additional Conditions Any shares of Common Stock issued or transferred under any provision of the Plan may be issued or transferred subject too such conditions, in addition to those specifically provided in the Plan, as the Committee or Bank South Corporation may impose. 19 4.3 No Rights as Shareholder or to Employment No Grantee or any other person authorized to purchase Common Stock upon exercise of an Option shall have any interest in or shareholder rights with respect to any shares of Common Stock which are subject to any Option or Stock Appreciation Rights until such shares have been issued and delivered to the Grantee or any such person pursuant to the exercise of such Option. Furthermore, the Plan shall not confer upon any Grantee any rights of employment with the Company, including, without limitation, any right to continue in the employ of the Company, or affect the right of the Company to terminate the employment of a Grantee at any time, with or without cause. 4.4 Legal Restrictions If in the opinion of legal counsel for Bank South Corporation the issuance or sale of any shares of Common Stock pursuant to the exercise of an Option would not be lawful for any reason, including without limitation the inability of Bank South Corporation to obtain from any governmental authority or regulatory body having jurisdiction the authority deemed necessary by such counsel for such issuance or sale, Bank South Corporation shall not be obligated to issue or sell any Common Stock pursuant to the exercise of an Option to a Grantee or any other authorized person unless a registration statement that complies with the provisions of the Securities Act of 1933, 20 as amended (the "Act"), in respect of such shares is in effect at the time thereof, or other appropriate action has been taken under and pursuant to the terms and provisions of the Act, or Bank South Corporation receives evidence satisfactory to such counsel that the issuance and sale of such shares, in the absence of an effective registration statement or other appropriate action, would not constitute a violation of the Act or any applicable state securities law. Bank South Corporation agrees to use its best efforts to make, in the opinion of such counsel the issuance or sale of shares of Common Stock pursuant to the exercise of an Option granted hereunder lawful. 4.5 Rights Unaffected The existence of the Options and Stock Appreciation Rights shall not affect: the right or power of Bank South Corporation or its shareholders to make adjustments, recapitalizations, reorganizations or other changes in Bank South Corporation's capital structure or its business; any issue of bonds, debentures, preferred or prior preference stocks affecting the Common Stock or the rights thereof; the dissolution or liquidation of Bank South Corporation, or sale or transfer of any part of its assets or business; or any other corporate act, whether of a similar character or otherwise. 21 4.6 Withholding Taxes As a condition of exercise of an Option or Stock Appreciation Right, Bank South Corporation may, in its sole discretion, withhold or require the Grantee to pay or reimburse Bank South Corporation for any taxes which Bank South Corporation determines are required to be withheld in connection with the grant or any exercise of an Option or Stock Appreciation Right. 4.7 Choice of Law The validity, interpretation and administration of the Plan and of any rules, regulations, determinations or decisions made thereunder, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with the laws of the State of Georgia. Without limiting the generality of the foregoing, the period within which any action in connection with the Plan must be commenced shall be governed by the Laws of the State of Georgia, without regard to the place where the act or omission complained of took place, the residence of any party to such action, or the place where the action may be brought or maintained. 22 4.8 Amendment, Suspension and Termination of Plan The Plan may, from time to time, be terminated, suspended or amended by the Board of Directors in such respects as it shall deem advisable in order (i) that the Incentive Stock Options granted hereunder shall be "incentive stock options" as such term is defined in Section 422 of the Code, or (ii) to conform to any change in any law or regulation governing the Plan, or the Options or Stock Appreciation Rights granted hereunder, including, without limitation, amendments to comply with the reporting and liability provisions of Section 16 of the Securities Exchange Act of 1934; provided, however, that no such amendment shall change the following: (a) The maximum aggregate number of shares for which Options may be granted under the Plan, except as required under any adjustment pursuant to Section 4.1 hereof; (b) The Option exercise price, with the exception of any change in such price required as a result of any adjustment pursuant to Section 4.1 hereof, and with the further exception of changes in determining Fair Market Value of shares of Common Stock to conform with any then applicable provision of the Code or regulations promulgated thereunder; 23 (c) The maximum Option Period during which Options or Stock Appreciation Rights may be exercised; (d) The maximum amount which may be paid upon exercise of a Stock Appreciation Right; (e) The termination date of the Plan in any manner which would extend such date; or (f) The requirements as to eligibility for participation in the Plan in any material respect. Notwithstanding any other provision herein contained, the Plan shall terminate and all Options and Stock Appreciation Right previously granted shall terminate, in the event and on the date of liquidation or dissolution of Bank South Corporation. AS APPROVED BY THE BOARD OF DIRECTORS OF BANK SOUTH CORPORATION on the 13 day of February, 1992. BANK SOUTH CORPORATION By: signature of Ralph E. Hutchins, Jr. Title: Sr. Executive Vice President 24 EX-99 7 EXHIBIT 99.5 BANKSOUTH CORPORATION 1993 EQUITY INCENTIVE PLAN (Effective January 1, 1993, as amended April 20, 1995) BANKSOUTH CORPORATION 1993 EQUITY INCENTIVE PLAN (Effective January 1, 1993, as amended April 20, 1995) Article 1. Establishment, Purpose, and Duration 1.1 Establishment of the Plan Bank South Corporation, a Georgia corporation (hereinafter referred to as the "Company"), hereby establishes an incentive compensation plan to be known as the "Bank South Corporation 1993 Equity Incentive Plan" (hereinafter referred to as the "Plan"), as set forth in this document. The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, and Performance Units. Upon approval by the Board of Directors of the Company, subject to ratification by an affirmative vote of a majority of Shares at the Company's April 15, 1993 annual shareholders' meeting, the Plan shall become effective as of January 1, 1993 (the "Effective Date"), and shall remain in effect as provided in Section 1.3 herein. Awards may be granted prior to shareholder ratification of the Plan; provided, however, that in the event shareholder approval of the Plan is not obtained, all outstanding Awards shall become null and void. 1.2 Purpose of the Plan The purpose of the Plan is to promote the success, and enhances the value, of the Company by linking the personal interests of Participants to those of Company shareholders, and by providing Participants with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Participants upon judgment, interest, and special effort the successful conduct of its operation largely is dependent. 1.3 Duration of the Plan Subject to approval by the Board of Directors of the Company and ratification by the shareholders of the Company, the Plan shall commence on the Effective Date, as described in Section 1.1 herein, and shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article 11 herein, until all Shares subject to it shall have been purchased or acquired according to the Plan's provisions. However, in no event may an Award be granted under the Plan on or after January 1, 2003. Article 2. Definitions Whenever used in the Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized: (a) "Award" means individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options or Performance Units. (b) "Award Agreement" means an agreement entered into by each Participant and the Company, setting forth the terms and provisions applicable to Awards granted to Participants under this Plan. (c) "Board" or "Board of Directors" means the Board of Directors of the Company. (d) "Cause" means: (i) willful or gross misconduct on the part of a Participant that is materially and demonstrably detrimental to the Company; or (ii) the commission by a Participant of one or more acts which constitute an indictable crime under United States Federal, state, or local law. "Cause" under either (i) or (ii) shall be determined in good faith by the Committee. (e) "Change in Control" will be deemed to have occurred as of the first day that any one or more of the following conditions has been satisfied: (i) the acquisition, directly or indirectly, by any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) within any twelve (12) month period of securities of the Company representing an aggregate of twenty-five percent (25%) or more of the combined voting power of the Company's then outstanding securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, cease for any reason to constitute at least a majority thereof, unless the election of each new director was approved in advance by a vote of at least a majority of the directors then still in office who were directors at the beginning of the period; or (iii) consummation of (a) a merger, consolidation or other business combination of the Company with any other "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) or affiliate thereof, other than a merger, consolidation or business combination which would result in the outstanding common stock of the Company immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into common stock of the surviving entity or a parent or affiliate thereof) at least sixty percent (60%) of the outstanding common stock of the Company or such surviving entity or parent or affiliate thereof outstanding immediately after such merger, consolidation or business combination, or (b) a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, or -2- (iv) the occurrence of any other event or circumstance which is not covered by (i) through (iii) above which the Board determines affects control of the Company and adopts a resolution that such event or circumstances constitutes a Change in Control. After the earlier of (i) a Change in Control, (ii) the public announcement of a transaction that, if consummated, would constitute a Change in Control, or (iii) the Board of Directors learning of a proposal for a transaction that, if consummated, would constitute a Change in Control, the Plan may not be amended to restrict the events which constitute a Change in Control for purposes of this Plan. However, if the transaction that would have constituted a Change in Control is subsequently withdrawn or abandoned, the definition may then be amended. (f) "Code" means the Internal Revenue Code of 1986, as amended from time to time. (g) "Committee" means the committee, as specified in Article 3, appointed by the Board to administer the Plan with respect to grants of Awards. (h) "Company" means Bank South Corporation, a Georgia corporation, or any successor thereto as provided in Article 14 herein. (i) "Director" means any individual who is a member of the Board of Directors of the Company. (j) "Disability" means a permanent and total disability within the meaning of Code Section 22(e)(3), as determined by the Committee in good faith, upon receipt of sufficient competent medical advice from one or more individuals, selected by the Committee, who are qualified to give professional medical advice. (k) "Employee" means any full-time employee of the Company or of the Company's Subsidiaries. Directors who are not otherwise employed by the Company shall not be considered Employees under this Plan. (l) "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, or any successor act thereto. (m) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. (n) "Fair Market Value" means the average of the highest and lowest quoted selling prices for Shares on the relevant date, or (if there were no sales on such date) the weighted average of the means between the highest and lowest quoted selling prices on the nearest day before and the nearest day after the relevant date, as determined by the Committee. -3- (o) "Incentive Stock Option" or "ISO" means an option to purchase Shares, granted under Article 6 herein, which is designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code. (p) "Insider" shall mean an Employee who is, on the relevant date, an officer or Director of the Company, as defined under Rule 16(a) of the Exchange Act. (q) "Noninsider" means an Employee who is not, on the relevant date, an Insider. (r) "Nonqualified Stock Option" or "NQSO" means an option to purchase Shares, granted under Article 6 herein, which is not intended to be an Incentive Stock Option. (s) "Option" means an Incentive Stock Option or a Nonqualified Stock Option. (t) "Option Price" means the price at which a Share may be purchased by a Participant pursuant to an Option, as determined by the Committee. (u) "Participant" means an Employee of the Company who has outstanding an Award granted under the Plan. (v) "Performance Unit" means an Award granted to a Participant pursuant to Article 7 herein. (w) "Retirement" shall mean early or normal retirement under the Bank South Corporation Employees' Retirement Plan and Trust (or its successor retirement plan). (x) "Shares" means the shares of common stock of the Company. (y) "Subsidiary" means any corporation in which the Company owns directly, or indirectly through subsidiaries, at least fifty percent (50%) of the total combined voting power of all classes of stock, or any other entity (including but not limited to, partnerships and joint ventures) in which the Company owns at least fifty percent (50%) of the combined equity thereof. (z) "Window Period" means the period beginning on the third business day following the date of public release of the Company's quarterly financial information and ending on the twelfth business day following such date. Article 3. Administration 3.1 The Committee The Plan shall be administered by the Compensation Committee of the Board, or by any other Committee appointed by the Board consisting of not less than two (2) Directors -4- who are not Employees. The members of the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board of Directors. The Committee shall be comprised solely of Directors who are eligible to administer the Plan pursuant to Rule 16b-3 under the Exchange Act and Section 162(m) of the Code, and the rules and regulations thereunder. However, if for any reason the Committee does not qualify to administer the Plan, as contemplated by Rule 16b-3 of the Exchange Act or Section 162(m) of the Code and the rules and regulations thereunder, the Board of Directors may appoint a new Committee so as to comply with Rule 16b-3 and Section 162(m) of the Code, and the rules and regulations thereunder. 3.2 Authority of the Committee The Committee shall have full power except as limited by law or by the Articles of Incorporation or Bylaws of the Company, and subject to the provisions herein, to determine the size and types of Awards; to determine the terms and conditions of such Awards in a manner consistent with the Plan; to construe and interpret the Plan and any agreement or instrument entered into under the Plan; to establish, amend, or waive rules and regulations for the Plan's administration; and (subject to the provisions of Article 11 herein) to amend the terms and conditions of any outstanding Award to the extent such terms and conditions are within the discretion of the Committee as provided in the Plan. Further, the Committee shall make all other determinations which may be necessary or advisable for the administration of the Plan. As permitted by law, the Committee may delegate its authorities as identified hereunder. 3.3 Decisions Binding All determinations and decisions made by the Committee pursuant to the provisions of the Plan and all related orders or resolutions of the Board of Directors shall be final, conclusive, and binding on all persons, including the Company, its stockholders, Employees, Participants, and their estates and beneficiaries. Article 4. Shares Subject to the Plan 4.1 Number of Shares Subject to adjustment as provided in Section 4.3 herein, the total number of Shares available for grant under the Plan may not exceed two million (2,000,000), and the maximum number of Shares that may be the subject of Options granted to any one individual in any consecutive three-year period is one hundred fifty thousand (150,000) Shares. These two million Shares may be either authorized but unissued or reacquired Shares. The following rules will apply for purposes of the determination of the number of Shares available for grant under the Plan: -5- (a) While an Award is outstanding, it shall be counted against the authorized pool of Shares, regardless of its vested status. (b) The grant of an Option shall reduce the Shares available for grant under the Plan by the number of Shares subject to such Award. (c) The payment of a Performance Unit in the form of a Share or Shares shall reduce the Shares available for grant under the Plan at the time of payment. (d) To the extent that an Award is settled in cash rather than in Shares, the authorized Share pool shall be credited with the appropriate number of Shares represented by the cash settlement of the Award, as determined at the sole discretion of the Committee (subject to the limitation set forth in Section 4.2 herein). 4.2 Lapsed Awards If any Award granted under this Plan is canceled, terminates, expires, or lapses for any reason, any Shares subject to such Award again shall be available for the grant of an Award under the Plan. However, in the event that prior to the Award's cancellation, termination, expiration, or lapse, the holder of the Award at any time received one or more "benefits of ownership" pursuant to such Award (as defined by the Securities and Exchange Commission, pursuant to any rule or interpretation promulgated under Section 16 of the Exchange Act), the Shares subject to such Award shall not be made available for regrant under the Plan. 4.3 Adjustments in Authorized Shares In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split-up, Share combination, or other change in the corporate structure of the Company affecting the Shares, such adjustment shall be made in the number and class of Shares which may be delivered under the Plan, and in the number and class of and/or price of Shares subject to outstanding Options granted, and Performance Units paid in Shares, under the Plan, as may be determined to be appropriate and equitable by the Committee, in its sole discretion, to prevent dilution or enlargement of rights; and provided that the number of Shares subject to any Award shall always be a whole number. Article 5. Eligibility and Participation 5.1 Eligibility Persons eligible to participate in this Plan include all full-time, active Employees of the Company and its Subsidiaries, as determined by the Committee, including Employees who are members of the Board, but excluding Directors who are not Employees. -6- 5.2 Actual Participation Subject to the provisions of the Plan, the Committee may, from time to time, select from all eligible Employees those to whom Awards shall be granted and shall determine the nature and amount of each Award. Article 6. Stock Options 6.1 Grant of Options Subject to the terms and provisions of the Plan, Options may be granted to Employees at any time and from time to time as shall be determined by the Committee. The Committee shall have discretion in determining the number of Shares subject to Options granted to each Participant. The Committee may grant ISO's, NQSOs, or a combination thereof. The Committee may delegate its duties to the Chief Executive Officer as regards Noninsiders. 6.2 Award Agreement Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the duration of the Option, the number of Shares to which the Option pertains, and such other provisions as the Committee shall determine. The Option Agreement also shall specify whether the Option is intended to be an ISO within the meaning of Section 422 of the Code, or a NQSO whose grant is intended not to fall under the Code provisions of Section 422. 6.3 Option Price The Option Price for each grant of an Option shall be determined by the Committee; provided that the Option Price shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted. 6.4 Duration of Options Each Option shall expire at such time as the Committee shall determine at the time of grant; provided, however, that no Option shall be exercisable later than the tenth (10th) anniversary date of its grant. 6.5 Exercise of Options Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant. 6.6 Payment Options shall be exercised by the delivery of a written notice of exercise to the Secretary of the Company, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. -7- The Option Price upon exercise of any Option shall be payable to the Company in full either: (a) in cash or its equivalent, or (b) by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Option Price (provided that the Shares that are tendered must have been held by the Participant for at least six(6) months prior to their tender to satisfy the Option Price), (c) through foregone income based on an arrangement with the Company, or (d) by a combination of (a), (b) and/or (c). The Committee also may allow cashless exercise as permitted under Federal Reserve Board's Regulation T, subject to applicable securities law restrictions, or by any other means which the Committee determines to be consistent with the Plan's purpose and applicable law. As soon as practicable after receipt of a written notification of exercise and full payment, the Company shall deliver to the Participant, in the Participant's name, Share certificates in an appropriate amount based upon the number of Shares purchased under the Option(s). 6.7 Restrictions on Share Transferability The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option under the Plan, as it may deem advisable, including, without limitation, restrictions under applicable Federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares. 6.8 Termination of Employment Due to Death, Disability, or Retirement (a) TERMINATION BY DEATH. In the event the employment of a Participant is terminated by reason of death, all outstanding Options granted to that Participant shall immediately vest one hundred percent (100%), and shall remain exercisable at any time prior to their expiration date, or for one (1) year after the date of death, whichever period is shorter, by such person as shall have been named as the Participant's beneficiary under Article 8. (b) TERMINATION BY DISABILITY. In the event the employment of a Participant is terminated by reason of Disability, all outstanding Options granted to that Participant shall immediately vest one hundred percent (100%) as of the date the Committee determines the definition of Disability to have been satisfied, and shall remain exercisable at any time prior to their expiration date, or for one (1) year after the date that the Committee determines the definition of Disability to have been satisfied, whichever period is shorter. (c) TERMINATION BY RETIREMENT. In the event the employment of a Participant is terminated by reason of Retirement, all outstanding Options granted to that Participant shall immediately vest one hundred percent (100%), and shall remain exercisable at any time prior to their expiration date. -8- (d) EMPLOYMENT TERMINATION FOLLOWED BY DEATH. In the event that a Participant's employment terminates by reason of Disability or Retirement, and within the exercise period following such termination the Participant dies, then the remaining exercise period under outstanding Options shall equal the shorter of: (i) one (1) year following death; or (ii) the remaining portion of the exercise period. Such Options shall be exercisable by such person or persons who shall have been named as the Participant's beneficiary under Article 8. (e) EXERCISE LIMITATIONS ON ISOS. In the case of ISOs, the tax treatment prescribed under Section 422 of the Code may not be available if the Options are not exercised within the Section 422 prescribed time periods after each of the various types of employment termination. 6.9 Termination of Employment for Other Reason If the employment of a Participant shall terminate for any reason other than the reasons set forth in Section 6.8 (and other than for Cause), all Options held by the Participant which are not vested as of the effective date of employment termination immediately shall be forfeited to the Company (and, subject to Section 4.2, shall once again become available for grant under the Plan). Options that are vested as of the effective date of employment termination may be exercised by the Participant within the period beginning on the effective date of employment termination, and ending 30 days after such date. If the employment of a Participant is terminated by the Company for Cause, all outstanding Options held by the Participant immediately shall be forfeited to the Company and no additional exercise period shall be allowed, regardless of the vested status of the Options. 6.10 Accelerated Vesting and Extended Exercisability Following Termination Regardless of the provisions regarding the exercisability of Options that are not vested as of the date of employment termination, and the provisions regarding the length of the exercise period following employment termination, as specified in Section 6.8 and 6.9 above, the Committee (or, in the case of Options held by Noninsiders, the Committee or the CEO), may in its or his sole discretion, subject to the limitation of Section 11.2 below, provide for accelerated Option vesting and/or for an extended period of exercisability following termination, upon such terms and provisions as it or he deems appropriate; provided however, that the period of exercisabilty shall not extend beyond the period specified in Section 6.4 herein. 6.11 Nontransferability of Options No Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in the Code or ERISA. Further, all Options granted to a Participant under the Plan shall be exercisable during his or her lifetime only by such Participant. -9- Article 7. Performance Units 7.1 Grant of Performance Units Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Performance Units to eligible Employees in such amounts as the Committee shall determine. Each Performance Unit shall represent a dollar amount to be specified by the Committee. The determination of the value of a Performance Unit will be made by the Committee. 7.2 Number of Performance Units Earned The Committee shall set performance goals in its discretion which, depending on the extent to which they are met, will determine the ultimate number or the Performance Units earned by the Participant. The time period during which the performance goals must be met shall be called a "Performance Period," and also is to be determined by the Committee. 7.3 Payment of Performance Units After a Performance Period has ended, the holder of a Performance Unit shall be entitled to receive the value thereof as determined by the original designation of the value of a Performance Unit, and the extent to which performance goals established by the Committee have been met. 7.4 Form and Timing of Payment Payment under Section 7.3 above shall be made in cash, stock, or a combination thereof as determined by the Committee. Payment may be made in lump sum or installments as prescribed by the Committee. If any payment is to be made on a deferred basis, the Committee may provide for the payment of dividend equivalents or interest during the deferral period. 7.5 Voting Rights and Dividends Participants are not entitled to vote Performance Units that represent Shares, or to receive dividends thereon, until actual receipt of Shares earned by the Participant (if any) after the applicable Performance Period established by the Committee has been completed, or upon earlier satisfaction of any other conditions as specified by the Committee. 7.6 Termination of Employment Due to Death, Disability, or Retirement In the case of Disability or Retirement, the holder of a Performance Unit shall receive prorata payment based on the number of months' service during the Performance Period, but based on the achievement of performance goals during the entire Performance Period. Payment shall be made at the time payments are made to participants who did not terminate service during the Performance Period. In the case of death, this provision will also apply, except that payment for all performance units held by the Participant for all open Performance Periods shall be based on the -10- performance goals achieved as of the end of the first Performance Period to expire following the Participant's death. 7.7 Termination of Employment for Other Reason In the event that a Participant terminates employment with the Company for any reason other than death, Disability, or Retirement, all Performance Units for Performance Periods that have not yet ended shall be forfeited. In the case of a Performance Period that ended prior to termination but for which payout has not yet been made, the Participant will receive the payout as though termination had not yet occurred. 7.8 Nontransferability Except as provided in this Article 7, the Performance Units granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until actual receipt of cash or Shares earned by the Participant after the applicable Performance Period established by the Committee has been completed, or upon earlier satisfaction of any other conditions, as specified by the Committee in its sole discretion. However, in no event may any Performance Unit granted under the Plan be paid out in Shares prior to six (6) months following the date of its grant. At time of grant, the Committee may provide that payment amounts will carry additional performance requirements or requirements for continued employment. All rights with respect to Performance Units granted to a Participant under the Plan shall be available during his or her lifetime only to such Participant. 7.9 Performance Units qualifying as "Performance-Based Compensation" under Section 162(m) of the Code. The Committee may, but shall not be required to, conform Performance Units to the parameters set forth in this Section 7.9. To the extent not inconsistent with this Section 7.9, the other provisions of Article 7 and the Plan shall apply to Performance Units granted hereunder. The parameters set forth below have been approved by the shareholders of the Company to qualify as "performance-based" compensation under Section 162 (m) of the Code. As used herein the term "Covered Employee" shall have the meaning given such term in Section 162(m) of the Code and the rules and regulations thereunder. The Committee shall within 90 days of the beginning of the applicable Performance Period, or any earlier or later date to the extent required or permitted by Code Section 162(m) without causing the award to fail to qualify as performance-based compensation, select the Participant to receive Performance Units for the Performance Period in question and adopt in writing each of the following: (i) a Target Award for each Participant expressed in terms of a number of units, each worth $1, to be earned at target performance, (ii) a performance measure based on the Company's compound annual total shareholder return (stock price increase plus dividends) over the Performance Period, (iii) a performance measure based on the percentile ranking of the Company's compound -11- annual total shareholder return as compared to a peer group of similar institutions selected by the Committee for such period, and (iv) a mathematical matrix combining the two performance measures as a method of determining the percent of the Target Award to be earned by the Participant with respect to the applicable Performance Period, including, in each case, a threshold performance level below which no award will be earned and a maximum award level. No Performance Unit award shall be paid to a Participant unless the relevant performance criteria for the Performance Period are met or exceeded. In no event shall the value of Performance Units paid to a Covered Employee under this Section 7.9 with respect to any one Performance Period exceed $2,000,000. Except as may be permitted under Section 162(m) of the Code or the rules and regulations thereunder, once established, neither the Target Award nor the performance criteria for Performance Units applicable to a Covered Employee pursuant to Section 7.9 of Plan may be amended. Article 8. Beneficiary Designation Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Secretary of the Company or his designee during the Participant's lifetime. In the absence of any such designation, or in the event the designated beneficiary does not survive the Participant, the Participant's beneficiary under this Plan shall be the Participant's beneficiary under the Company's group life insurance program. Article 9. Rights of Employees 9.1 Employment Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant's employment at any time, nor confer upon any Participant any right to continue in the employ of the Company. For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Subsidiaries (or between Subsidiaries) shall not be deemed a termination of employment. 9.2 Participation No Employee shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award -12- Article 10. Change in Control Upon the occurrence of a Change In Control, unless otherwise specifically prohibited by the terms of Section 11 herein: (a) Any and all Options granted hereunder shall become immediately exercisable; (b) All open Performance Periods for Performance Units shall end, and within 120 days after the occurrence of a Change in Control, the value of Performance Units granted for those Performance Periods (calculated as set forth in the following sentence) will be paid in cash to the Participant. The amount to be paid to the Participant in the event of a Change in Control shall be calculated by measuring total shareholder return over the Performance Period in question, using as the ending measure (both as to the Company and the comparison peer group) the average performance results over the 20 trading days prior to the earlier of (i) the announcement of the Change in Control or (ii) the announcement of an agreement in principle, or the signing of a definitive agreement, to enter into a transaction that would, if consummated, constitute a Change in Control (the "Announcement Date"), and including all dividends paid through the Announcement Date. In addition, any restrictions on sale of shares received in connection with prior Performance Periods will lapse. Article 11. Amendment, Modification, and Termination 11.1 Amendment, Modification, and Termination With the approval of the Board, at any time and from time to time, the Committee may terminate, amend, or modify the Plan. However, without the approval of the stockholders of the Company (as may be required by the Code, by the insider trading rules of Section 16 of the Exchange Act, by any national securities exchange or system on which the Shares are then listed or reported, or by a regulatory body having jurisdiction with respect hereto), no such termination, amendment, or modification may: (a) Materially increase the total number of Shares which may be issued under this Plan, except as provided in Section 4.3 herein; or (b) Materially modify the eligibility requirements for participation in this Plan; or (c) Materially increase the benefits accruing to Insiders under the Plan. In the event of a Change in Control, the public announcement of a transaction that, if consummated, would constitute a Change in Control, or the Board of Directors learning of a proposal for a transaction that, if consummated, would constitute a Change in Control, termination, amendment or modification of this Plan or an Award, either of which could adversely affect an Award in any material way, shall require the consent of the Participant (or the Participant's Beneficiary in the event of the Participant's death). Such -13- consent shall not be required if the transaction that would have constituted a Change in Control is subsequently withdrawn or abandoned. 11.2 Awards Previously Granted No termination, amendment, or modification of the Plan shall, without the written consent of the affected Participant, adversely affect in any material way (i) any Option previously granted under the Plan or (ii) any Performance Unit for which the Performance Period applicable to such Performance Unit has ended. The Committee may, without the consent of the affected Participant, terminate, amend or modify the Plan with respect to any Performance Unit prior to the close of the Performance Period applicable to such Performance Unit. If the Plan is terminated, however, the affected Participant shall receive a prorata payment based on the number of months' service during the Performance Period, but based on the achievement of performance goals as of the date of Plan's termination. Payment shall be made as soon as administratively possible following the Plan's termination. If the Plan is amended or modified with respect to a Performance Unit, such amendment or modification may not, without the consent of the affected Participant, reduce the potential payout under such Performance Unit below that amount which the Participant would have received assuming the Plan was terminated as of the date of the amendment or modification. In the event of the Participant's death, the Participant's consent, where required, must be given by the Participant's Beneficiary. Article 12. Withholding 12.1 Tax Withholding The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant's FICA obligation) required by law to be withheld with respect to any taxable event arising or as a result of this Plan. 12.2 Share Withholding With respect to withholding required upon the exercise of Options, upon the payout of Performance Units in the form of Shares, or upon any other taxable event hereunder, Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax which could be imposed on the transaction. All elections shall be irrevocable, made in writing, signed by the Participant, and elections by Insiders shall additionally comply with the applicable requirement set forth in (a) or (b) of this Section 12.2. -14- (a) STOCK OPTIONS. The Participant must either: (i) Deliver written notice of the stock withholding election to the Committee at least six (6) months prior to the date specified by the Participant on which the exercise of the Option is to occur; or (ii) Make the stock withholding election in connection with an exercise of an Option that occurs during a Window Period. (b) PERFORMANCE UNITS. The Participant must either: (i) Deliver written notice of the stock withholding election to the Committee at least six (6) months prior to the date on which the taxable event relating to the Award is scheduled to occur; or (ii) Make the stock withholding election during a Window Period which occurs prior to the scheduled taxable event relating to the Performance Unit (for this purpose, an election may be made prior to such a Window Period, provided that it becomes effective during a Window Period occurring prior to the applicable taxable event). Article 13. Indemnification Each person who is or was a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan unless arising out of such person's willful or gross misconduct. Such indemnification shall include any and all amounts paid by him or her in settlement thereof, with the Company's approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. Article 14. Successors All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such -15- successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. Article 15. Legal Construction 15.1 Gender and Number Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. 15.2 Severability In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. 15.3 Requirements of Law The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. Notwithstanding any other provision set forth in the Plan, if required by the then-current Section 16 of the Exchange Act, any "derivative security" or "equity security" granted pursuant to the Plan to an Insider may not be sold or transferred for at least six (6) months after the date of grant of such Award, and if an equity security is acquired by an Insider pursuant to the exercise or conversion of a derivative security within six (6) months of the grant of the derivative security hereunder, such equity security may not be sold or transferred until the expiration of such six-month period. The terms "equity security" and "derivative security" shall have the meanings ascribed to them in the then-current Rule 16(a) under the Exchange Act. 15.4 Securities Law Compliance With respect to Insiders, transactions under this Plan are intended to comply with all applicable conditions or 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 null and void, to the extent permitted by law and deemed advisable by the Committee. 15.5 Foreign Employees To the extent permissible under applicable law, the Company may make grants of Awards to eligible Employees who are employed in locations outside of the United States. The Committee shall have the authority to modify the terms of Awards granted to such Employees in order to ensure compliance with applicable local and national law. -16- 15.6 Governing Law To the extent not preempted by Federal law (or foreign law in the case of grants to Employees who are not United States residents), the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Georgia. 15.7 Regulatory Compliance It is the intention that any and all provisions of this Plan be consistent and comply with applicable laws or regulations enacted or promulgated before or after the execution or adoption of this Plan, and to the extent that any such provision is inconsistent or in noncompliance with applicable laws or regulations, the provision or portion thereof that is inconsistent or in noncompliance will be deemed void. IN WITNESS WHEREOF, Bank South Corporation has caused this document to be executed as of the 20th day of April, 1995. BANK SOUTH CORPORATION By: ____________________ ATTEST: By: _______________________ -17- EX-99 8 EXHIBIT 99.6 1988 SUBSTITUTE STOCK OPTION PLAN OF CHATTAHOOCHEE BANCORP, INC. FOR THE 1987 STOCK OPTION PLAN OF THE BUCKHEAD BANK ARTICLE I GENERAL 1.1 Purpose of the Plan. The purpose of the 1988 Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the 1987 Stock Option Plan of The Buckhead Bank (the "Plan") is (i) for Chattahoochee Bancorp, Inc. (the "Company") to assume The Buckhead Bank 1987 Stock Option Plan (the "Former Plan"); (ii) for the Company to assume all outstanding options and stock appreciation rights granted under the Former Plan; (iii) to assist the Company and The Buckhead Bank ("Buckhead") in securing and retaining key employees of outstanding ability by making it possible to offer them an increased incentive to join or continue in the service of the Company and Buckhead; and (iv) to increase the key employees' efforts for the Company's and Buckhead's welfare by participating in the ownership and growth of the Company. 1.2 Definitions (a) "Acceleration Event" means any event which in the opinion of the Board of Directors of the Company is likely to lead to changes in control of share ownership of the Company, whether or not such change in control actually occurs; (b) "Board of Directors" or "Board" means the Board of Directors of the Company; (c) "Code" means the Internal Revenue Code of 1986, as amended; (d) "Common Stock" means common stock of the Company having a par value of $1.00 per share. (e) "Fair Market Value", so long as the Common Stock is not traded on an established securities market, means the value determined by the Board of Directors of the Committee (as hereinafter defined) taking into account those factors affecting or reflecting value as it deems relevant, including, but not limited to, recent sales prices, book value, earnings, reasonably expected changes in book value or earnings, and values of stock of banks similar to the Company. If the Common Stock is traded in the over-the-counter market, fair market value means the closing "asked" price of the shares in the over-the-counter market on the day on which such value is to be determined or, if such "asked" price is not available, the last sales price on such day or, if no shares were traded on such day, on the next preceding day on which the shares were traded, as reported by the National Association of Securities Dealers Automatic Quotation System (NASDAQ) or other national quotation service. If the shares are listed on a National Securities Exchange, "fair market value" means the closing price of the shares on such National Securities Exchange on the day on which such value is to be determined or, if no shares were traded on such day, on the next preceding day on which shares were traded, as reported by National Quotation Bureau, Inc. or other national quotation service; (f) "Incentive Stock Option" means an option or Substituted Option to purchase shares of Common Stock which is intended to qualify as an incentive stock option as defined in Section 422A of the Code; (g) "Key Employee" means any person, including officers and directors, in the regular full-time employment of the Company or its Subsidiaries who, is designated a Key Employee by the Committee referred to in Section 1.3, and is or is expected to be primarily responsible for the management, growth, or supervision of some part or all of the business of the Company or its Subsidiaries. The power to determine who is and who is not a Key Employee is reserved solely for the Committee; (h) "Nonqualified Stock Option" means an option or Substituted Option to purchase shares of Common Stock which is not intended to qualify as an Incentive Stock Option as defined in Section 422A of the Code; (i) "Option" means an Incentive Stock Option or a Nonqualified Stock Option; (j) "Optionee" means a Key Employee to whom an Option is granted under the Plan; (k) "Parent" means any corporation which qualifies as a parent of a corporation under the definition of "parent corporation" contained in Section 425(e) of the Code; (l) "Stock Appreciation Right" shall have the meaning stated in Article IV of the Plan; (m) "Subsidiary" means any corporation which qualifies as a subsidiary of a corporation under the definition of "subsidiary corporation" contained in Section 425(f) of the Code; (n) "Substituted Options" means an incentive stock option or nonqualified stock option granted under the Former Plan and assumed by the Company in accordance with Code Section 425 (see Section 1.4(b) of the Plan); -2- (o) "Term" means the period during which a particular Option may be exercised as determined by the Committee and as provided in the option agreement. 1.3 Administration of the Plan. The Plan shall be administered by the Stock Option Committee (the "Committee") appointed by the Board of Directors consisting of at least three members from the Board of Directors. No person while a member of the Committee shall be eligible to participate in the Plan. Subject to the control of the Board, and without limiting the generality thereof, Section 1.7 hereof, the Committee shall have the power to interpret and apply the Plan and to make regulations for carrying out its purpose. More particularly, the Committee shall determine which Key Employees shall be granted Options under the Plan, the number of shares subject to each Option, the price per share under each Option, the Term of each Option, and any restrictions on the exercise of each Option. When granting Options, the Committee shall designate the Option as either an Incentive Stock Option or a Nonqualified Stock Option. The Committee shall also designate whether the Option is granted with Stock Appreciation Rights. Determinations by the Committee under the Plan (including, without limitation, determinations of the person to receive Options, the form, amount and timing of such Options, and the terms and provisions of such Options and the agreements evidencing same) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Options under the Plan, whether or not such persons are similarly situated. 1.4 Shares Subject to the Plan. (a) The total number of shares that may be purchased pursuant to Options or transferred pursuant to the exercise of Stock Appreciation Rights under the Plan shall not exceed 200,000 shares of Common Stock. Shares subject to the Options which terminate or expire prior to exercise shall be available for future Options. Shares represented by an unexercised Option surrendered upon an exercise of Stock Appreciation Rights including, without duplication, any shares issued in payment of any Stock Appreciation Rights, shall be deducted from the aggregate and shall not be available for further Options hereunder. Shares issued pursuant to the Plan may be either unissued shares of Common Stock or reacquired shares of Common Stock held in treasury. (b) Options and Stock Appreciation Rights have been issued under the Former Plan prior to the Company's formation and subsequent merger with the Chattahoochee Financial Corporation ("Chattahoochee") as contemplated by the Agreement and Plan of Reorganization dated as of July 15, 1988, by and among the Company, Buckhead and the Chattahoochee (the "Reorganization"). Notwithstanding anything to the contrary in -3- this Plan, all Options and Stock Appreciation Rights outstanding under the Former Plan immediately prior to the Reorganization shall be assumed by the Company. Substituted Options shall be issued for all Options and Stock Appreciation Rights granted under the Former Plan in accordance with the principles of Code Sections 425(a) and 425(h). Shares subject to such Substituted Options shall be considered part of the 200,000 shares of Stock reserved for issuance under this Plan. In the event a Substituted Option lapses, the shares subject to such lapsed Substituted Option shall become available for further grants under this Plan. 1.5 Terms and Conditions of Options. All Options shall be evidenced by agreements in such form as the Committee shall approve from time to time subject to the provisions of Article II or Article III, as appropriate, and the following provisions: (a) Exercise Price. Except as provided in Section 3.1, the exercise price of the Option shall not be less than the Fair Market Value (as determined by the Committee) of the Common Stock at the time the Option is granted. (b) Exercise. The Committee shall determine whether the Option shall be exercisable in full at any time during the Term or in cumulative or noncumulative installments during the Term. (c) Termination of Employment. An Optionee's Option shall expire on the earlier of the expiration of (i) three months after the termination of the Optionee's employment for any reason other than death or disability (as defined in Section 422A(c)(7) of the Code), or (ii) the Term specified in Section 2.1 or 3.1(a) as the case may be. In the event of exercise of the Option after termination of employment the Optionee may exercise the Option only with respect to the shares which could have been purchased by the Optionee at the date of termination of employment. However, the Committee may, but is not required to, waive any requirements made pursuant to Section 1.5(b) so that some or all of the shares subject to the Option may be exercised within the time limitation described in this subsection. An Optionee's employment shall be deemed to terminate on the last date for which he receives a regular wage or salary payment. (d) Death or Disability. Upon termination of an Optionee's employment by reason of death or disability (as determined by the Committee consistent with the definition of Section 422A(c)(7) of the Code), the Option shall expire unless exercised upon the earlier of the expiration of (i) 12 months of the date of such termination, or (ii) the Term specified in Section 2.1 or 3.1(a) as the case may be. The Optionee or his successor in interest, as the case may be, may exercise the Option only as to the shares which could have been purchased by the -4- Optionee at the date of his termination of employment. However, the Committee may, but is not required to, waive any requirements made pursuant to Section 1.5(b) so that some or all of the shares subject to the Option may be exercised with the time limitations described in this subsection. (e) Payment. Payment for shares as to which an Option is exercised shall be made in such manner and at such time or times as shall be provided in the option agreement, including cash, Common Stock of the Company which was previously acquired by the Optionee, or any combination thereof. The Fair Market Value of the surrendered Common Stock as of the date of exercise shall be determined in valuing Common Stock used in payment for Options. (f) Nontransferability. No Option granted under the Plan shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee. (g) Additional Provisions. Each option agreement may contain such other terms and conditions not inconsistent with the provisions of the Plan as the Committee may deem appropriate from time to time. 1.6 Stock Adjustments; Mergers. Notwithstanding Section 1.4, in the event the outstanding shares are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of any other corporation by reason of any merger, sale of stock, consolidation, liquidation, recapitalization, reclassification, stock split up, combination of shares, or stock dividend, the total number of shares set forth in Section 1.4 shall be proportionately and appropriately adjusted by the Committee. If the Company continues in existence, (i) the number and kind of shares that are subject to any Option and the option price per share shall be proportionately and appropriately adjusted without any change in the aggregate price to be paid therefor upon exercise of the Option, and (ii) the Committee may make such adjustments in the number and kind of Stock Appreciation Rights as it shall deem appropriate in the circumstances. If the Company will not remain in existence or substantially all of its voting Common Stock and Common Stock will be purchased by a single purchaser or group of purchasers acting together, then the Committee may (i) declare that all Options and Stock Appreciation Rights shall terminate 30 days after the Committee gives written notice to the Optionees of their immediate right to exercise all Options and Stock Appreciation Rights then outstanding (without regard to limitations on exercise otherwise contained in the Options), or (ii) notify all Optionees that all Options and Stock Appreciation Rights granted under the Plan shall apply with appropriate -5- adjustments as determined by the Committee to the securities of the successor corporation to which holders of the numbers of shares subject to such Options and Stock Appreciation Rights would have been entitled, or (iii) some combination of aspects of (i) and (ii). The determination by the Committee as to the terms of any of the foregoing adjustments shall be conclusive and binding. Any fractional shares resulting from any of the foregoing adjustments under this section shall be disregarded and eliminated. 1.7 Acceleration Event. If an Acceleration Event occurs in the opinion of the Board of Directors, based on circumstances known to it, the Board of Directors may direct the Committee to declare that all Options and Stock Appreciation Rights granted under the Plan shall become exercisable immediately notwithstanding the provisions of the respective Option agreements regarding exercisability. 1.8 Notification of Exercise. Options shall be exercised by written notice directed to the Secretary of the Company at the principal executive offices of the Company. Such written notice shall be accompanied by any payment required pursuant to Section 1.5(e). Exercise by an Optionee's heir or the representative of his estate shall be accompanied by evidence of his authority to so set in form reasonably satisfactory to the Company. ARTICLE II INCENTIVE STOCK OPTIONS 2.1 Terms of Incentive Stock Options. Each Incentive Stock Option granted under the Plan shall be exercisable only during a Term fixed by the Committee; provided, however, that the Term shall end no later than 10 years after the date the Incentive Stock Option is granted. 2.2 Limitation on Options. The aggregate Fair Market Value of Common Stock (determined at the time the Incentive Stock Option is granted) subject to Incentive Stock Options granted to a Key Employee under all plans of the Key Employee's employer corporation and its Parent or Subsidiary corporations and that become exercisable for the first time by such Key Employee during any calendar year may not exceed $100,000. -6- 2.3 Continued Employment. Whether military, government or other service or other leave of absence shall constitute a termination of employment shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive. A termination of employment shall not occur where the Optionee transfers from the Company to one of its Subsidiaries or transfers from a Subsidiary to the Company. 2.4 Special Rule for Ten Percent Shareholder. If at the time an Incentive Stock Option is granted, an employee owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of his employer corporation or of its Parent or any of its Subsidiaries, as determined using the attribution rules of Section 425(d) of the Code, then the terms of the Incentive Stock Option shall specify that the option price shall be at least 110% of the Fair Market Value of the stock subject to the Incentive Stock Option and such Incentive Stock Option shall not be exercisable after the expiration of five years from the date such Incentive Stock Option is granted. 2.5 Interpretation. In interpreting this Article II of the Plan and the provisions of individual option agreements, the Committee and the Board shall be governed by the principles and requirements of Sections 421, 422A and 425 of the Code, and applicable Treasury Regulations. ARTICLE III NONQUALIFIED STOCK OPTIONS 3.1 Terms and Conditions of Options. In addition to the requirements of Section 1.5, Nonqualified Stock Options shall be subject to the following provisions: (a) Term. Each Nonqualified Stock Option granted under the Plan shall be exercisable only during a Term fixed by the Committee. (b) Termination of Employment. Notwithstanding the provisions of Sections 1.5(c) and 1.5(d), the Stock Option Committee in its discretion may provide, either upon the original grant of an Option or in an amendment to an Incentive or Nonqualified Stock Option, that an Option may be exercisable during a Term that does not expire upon the expiration of three months following an Optionee's termination of -7- employment (one year in the case of termination as a result of death or disability), but in no event later than the Term specified in Section 3.1(a) above. (c) Exercise Price. The Company may elect to grant Nonqualified Stock Options at a price less than the Fair Market Value of the Common Stock at the time the Option is granted but in no event less than the par value of the Common Stock. 3.2 Section 83(b) Election. The Company recognizes that certain persons who receive Nonqualified Stock Options may be subject to restrictions regarding their right to trade Common Stock under applicable securities laws. Such may cause Optionee's exercising such Options not to be taxable under the provisions of Section 83(c) of the Code. Accordingly, Optionees exercising such Nonqualified Stock Options may consider making an election to be taxed upon exercise of the Option under Section 83(b) of the Code and to effect such election will file such election with the Internal Revenue Service within thirty (30) days of exercise of the Option and otherwise in accordance with applicable Treasury Regulations. ARTICLE IV STOCK APPRECIATION RIGHTS 4.1 Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights ("SAR") may be, but are not required to be, granted by the Committee in connection with grant of an Option. All SARs shall be in such form as the Committee may from time to time determine and shall be subject to the following terms and conditions: (a) Term and Exercise. An SAR shall be exercisable only (i) with the approval of the Committee, (ii) during the Term of the Option to which it relates, (iii) at such times as the Option to which it relates is exercisable, and (iv) if the Fair Market Value of the Common Stock subject to the Option surrendered (on the date surrendered) minus the aggregate option price of the Common Stock subject to the Option surrendered is a positive amount. (b) Payment. In the event the Committee agrees to permit exercises of the SAR, the Optionee shall surrender to the Company the right to exercise the Option with respect to a specified number of shares as to which the Option is then exercisable. In return, the Optionee shall receive from the Company no more than an amount payable in cash and/or in shares (as determined by the Committee after considering the request -8- of the Optionee) equal to the difference between the Fair Market Value of Common Stock as to which the Optionee has surrendered the Option and the exercise price with respect thereto. In the event the Committee determines to tender shares in full or partial payment of the SAR, the number of shares to be issued to the Optionee shall be based on the Fair Market Value of the shares as of the date of exercise of the SAR. No fractional shares shall be issued to Optionees upon exercise of an SAR. Instead, the Company shall pay the Optionee the value of such fractional share based upon the Fair Market Value of a share on the date the SAR is exercised. (c) Nontransferability. An SAR granted under the Plan shall be transferable only when the Option to which it relates is transferable. 4.2 Other Terms and Conditions. Option agreements and reflecting Stock Appreciation Rights which are granted under the Plan may contain such other conditions not inconsistent with the provisions of the Plan as the Committee may deem appropriate from time to time. 4.3 Notification of Request to Exercise. The Optionee shall request the Committee's approval to exercise a Stock Appreciation Right by written notice to the Secretary of the Company at the principal executive offices of the Company. Such written notice shall state the number of shares subject to the Option for which approval of the exercise of the SAR is requested and the Optionee's preferred form of payment of the SAR, as hereinafter provided. The Optionee may indicate his or her preference to receive payment of the SAR in cash or in Common Stock or in a combination thereof. Notwithstanding anything to the contrary contained herein, the Committee shall have absolute discretion in determining whether the request for approval of the exercise of the SAR shall be approved and, if such approval is given, whether payment shall be made in cash or Common Stock or in a combination thereof. Within 30 days after the delivery to the Secretary of the Optionee's request to exercise the SAR as provided above, the Committee shall inform the Optionee in writing of its determination by personal delivery of such written determination to the Optionee or by mailing its written determination to the Optionee by certified or registered mail, return receipt requested. The Optionee must act on any approved exercise of an SAR within 30 days after the date of such determination by the Committee (or such longer period as may be permitted by the Committee) and in accordance with the terms approved by the Committee. Exercise shall be by written notice actually delivered, or mailed by certified or registered mail, return receipt requested, to the Secretary of the Company at the principal executive offices of the Company. -9- 4.4 Effect of Exercise. Upon the exercise of a Stock Appreciation Right, the Option to which it relates shall lapse with respect to the shares as to which the SAR is exercised and such shares shall not be available for further grant of Options. ARTICLE V ADDITIONAL PROVISIONS 5.1 Stockholder Approval. The Plan shall be submitted for the approval of the stockholders of the Company at the first annual meeting of stockholders held subsequent to or coincident with the adoption of the Plan in all events within one year of its approval by the Board of Directors. If at said meeting the stockholders of the Company do not approve the Plan, the Plan shall terminate. 5.2 Compliance with Other Laws and Regulations. The Plan, the grant and exercise of Options hereunder, and the obligation of the Company to sell and deliver shares under such Options, shall be subject to all applicable Federal and state laws, rules, and regulations and to such approvals by any government or regulatory agency as may be required. The Company shall not be required to issue or deliver any certificates for shares of Common Stock prior to (a) the listing of such shares on any stock exchange on which the Common Stock may then be listed and (b) the completion of any registration or qualification of such shares under any Federal or state law, or any ruling or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable. 5.3 Amendments. The Board of Directors may discontinue the Plan at any time, and may amend it from time to time, but no amendment, without approval by stockholders, may (a) increase the total number of shares which may be issued under the Plan or to any individual under the Plan, (b) reduce the Option price for shares which may be purchased pursuant to Options under Articles II and III of the Plan, (c) extend the period during which Options may be granted, or (d) change the class of employees to whom Options may be granted, except as provided in Section 1.6. Other than as expressly permitted under the Plan, no outstanding Option may be revoked or altered in a manner unfavorable to the Optionee without the consent of the Optionee. -10- 5.4 No Rights As Shareholder. No Optionee shall have any rights as a shareholder with respect to any share subject to his or her Option prior to the date of issuance to him or her of a certificate or certificates for such shares. 5.5 Withholding. Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the Optionee to remit to the Company an amount sufficient to satisfy any Federal, state or local withholding tax liability prior to the delivery of any certificate or certificates for such shares. Whenever under the Plan payments are to be made in cash, such payments shall be made net of an amount sufficient to satisfy any Federal, state, or local withholding tax liability. 5.6 Continued Employment Not Presumed. This Plan and any document describing this Plan and the grant of any stock Option or Stock Appreciation Right hereunder shall not give any Optionee or other employee a right to continued employment by the Company or its Subsidiaries or affect the right of the Company or its Subsidiaries to terminate the employment of any such person with or without cause. 5.7 Effective Date; Duration. The Plan shall become effective as of the consummation of the Reorganization subject to stockholder approval pursuant to Section 5.1 and shall expire on March 31, 1997. No Options may be granted under the Plan after March 31, 1997, but Options granted on or before that date may be exercised according to the terms of the option agreements and shall continue to be governed by and interpreted consistent with the terms hereof. -11- EX-99 9 EXHIBIT 99.7 1988 SUBSTITUTE STOCK OPTION PLAN OF CHATTAHOOCHEE BANCORP., INC. FOR THE 1987 STOCK OPTION PLAN OF THE CHATTAHOOCHEE FINANCIAL CORPORATION ARTICLE I GENERAL 1.1 Purpose of the Plan. The purpose of the 1988 Substitute Stock Option Plan of Chattahoochee Bancorp, Inc. for the 1987 Stock Option Plan of The Chattahoochee Financial Corporation (the "Plan") is (i) for Chattahoochee Bancorp, Inc. (the "Company") to assume The Chattahoochee Financial Corporation 1987 Stock Option Plan (the "Former Plan"); (ii) for the Company to assume all outstanding options and stock appreciation rights granted under the Former Plan; (iii) to assist the Company and its Subsidiaries, including The Chattahoochee Bank ("Chattahoochee"), in securing and retaining key employees of outstanding ability by making it possible to offer them an increased incentive to join or continue in the service of the Company and Chattahoochee; and (iv) to increase the key employees' efforts for the Company's and Chattahoochee's welfare by participating in the ownership and growth of the Company. 1.2 Definitions (a) "Acceleration Event" means any event which in the opinion of the Board of Directors of the Company is likely to lead to changes in control of share ownership of the Company, whether or not such change in control actually occurs; (b) "Board of Directors" or "Board" means the Board of Directors of the Company; (c) "Code" means the Internal Revenue Code of 1986, as amended; (d) "Common Stock" means common stock of the Company having a par value of $1.00 per share; (e) "Fair Market Value", so long as the Common Stock is not traded on an established securities market, means the value determined by the Board of Directors or the Committee (as hereinafter defined) taking into account those factors affecting or reflecting value as it deems relevant, including, but not limited to, recent sales prices, book value, earnings, reasonably expected changes in book value or earnings, and values of stock of banks similar to the Company. If the Common Stock is traded in the over-the-counter market, fair market value means the closing "asked" price of the shares in the over-the-counter market on the day on which such value is to be determined or, if such "asked" price is not available, the last sales price on such day or, if no shares were traded on such day, on the next preceding day on which the shares were traded, as reported by the National Association of Securities Dealers Automatic Quotation System (NASDAQ) or other national quotation service. If the shares are listed on a National Securities Exchange, "fair market value" means the closing price of the shares on such National Securities Exchange on the day on which such value is to be determined or, if no shares were traded on such day, on the next preceding day on which shares were traded, as reported by National Quotation Bureau, Inc. or other national quotation service; (f) "Incentive Stock Option" means an option or Substituted Option to purchase shares of Common Stock which is intended to qualify as an incentive stock option as defined in Section 422A of the Code; (g) "Key Employee" means any person, including officers and directors, in the regular full-time employment of the Company or its Subsidiaries who, is designated a Key Employee by the Committee referred to in Section 1.3, and is or is expected to be primarily responsible for the management, growth, or supervision of some part or all of the business of the Company or its Subsidiaries. The power to determine who is and who is not a Key Employee is reserved solely for the Committee; (h) "Nonqualified Stock Option" means an option or Substituted Option to purchase shares of Common Stock which is not intended to qualify as an Incentive Stock Option as defined in Section 422A of the Code; (i) "Option" means an Incentive Stock Option or a Nonqualified Stock Option; (j) "Optionee" means a Key Employee to whom an Option is granted under the Plan; (k) "Parent" means any corporation which qualifies as a parent of a corporation under the definition of "parent corporation" contained in Section 425(e) of the Code; (l) "Stock Appreciation Right" shall have the meaning stated in Article IV of the Plan; (m) "Subsidiary" means any corporation which qualifies as a subsidiary of a corporation under the definition of "subsidiary corporation" contained in Section 425(f) of the Code; -2- (n) "Substituted Option" means an incentive stock option or nonqualified stock option granted under the Former Plan and assumed by the Company in accordance with Code Section 425 (see Section 1.4(b) of the Plan); (o) "Term" means the period during which a particular Option may be exercised as determined by the Committee and as provided in the option agreement. 1.3 Administration of the Plan. The Plan shall be administered by the Stock Option Committee (the "Committee") appointed by the Board of Directors consisting of at least three members from the Board of Directors. No person while a member of the Committee shall be eligible to participate in the Plan. Subject to the control of the Board, and without limiting the generality thereof, Section 1.7 hereof, the Committee shall have the power to interpret and apply the Plan and to make regulations for carrying out its purpose. More particularly, the Committee shall determine which Key Employees shall be granted Options under the Plan, the number of shares subject to each Option, the price per share under each Option, the Term of each Option, and any restrictions on the exercise of each Option. When granting Options, the Committee shall designate the Option as either an Incentive Stock Option or a Nonqualified Stock Option. The Committee shall also designate whether the Option is granted with Stock Appreciation Rights. Determinations by the Committee under the Plan (including, without limitation, determinations of the person to receive Options, the form, amount and timing of such Options, and the terms and provisions of such Options and the agreements evidencing same) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Options under the Plan, whether or not such persons are similarly situated. 1.4 Shares Subject to the Plan. (a) The total number of shares that may be purchased pursuant to Options or transferred pursuant to the exercise of Stock Appreciation Rights under the Plan shall not exceed 200,000 shares of Common Stock. Shares subject to the Options which terminate or expire prior to exercise shall be available for future Options. Shares represented by an unexercised Option surrendered upon an exercise of Stock Appreciation Rights including, without duplication, any shares issued in payment of any Stock Appreciation Rights, shall be deducted from the aggregate and shall not be available for further Options hereunder. Shares issued pursuant to the Plan may be either unissued shares of Common Stock or reacquired shares of Common Stock held in treasury. -3- (b) Options and Stock Appreciation Rights have been issued under the Former Plan prior to the Company's merger with The Chattahoochee Financial Corporation ("Chattahoochee Financial") as contemplated by the Agreement and Plan of Reorganization dated as of July 15, 1988, by and among the Company, The Buckhead Bank, and Chattahoochee Financial (the "Reorganization"). Notwithstanding anything to the contrary in this Plan, all Options and Stock Appreciation Rights outstanding under the Former Plan immediately prior to the Reorganization shall be assumed by the Company. Substituted Options shall be issued for all Options and Stock Appreciation Rights granted under the Former Plan in accordance with the principles of Code Sections 425(a) and 425(h). Shares subject to such Substituted Options shall be considered part of the 200,000 shares of Stock reserved for issuance under this Plan. In the event a Substituted Option lapses, the shares subject to such lapsed Substituted Option shall become available for further grants under this Plan. 1.5 Terms and Conditions of Options. All Options shall be evidenced by agreements in such form as the Committee shall approve from time to time subject to the provisions of Article II or Article III, as appropriate, and the following provisions: (a) Exercise Price. Except as provided in Section 3.1, the exercise price of the Option shall not be less than the Fair Market Value (as determined by the Committee) of the Common Stock at the time the Option is granted. (b) Exercise. The Committee shall determine whether the Option shall be exercisable in full at any time during the Term or in cumulative or noncumulative installments during the Term. (c) Termination of Employment. An Optionee's Option shall expire on the earlier of the expiration of (i) three months after the termination of the Optionee's employment for any reason other than death or disability (as defined in Section 422A(c)(7) of the Code), or (ii) the Term specified in Section 2.1 or 3.1(a) as the case may be. In the event of exercise of the Option after termination of employment the Optionee may exercise the Option only with respect to the shares which could have been purchased by the Optionee at the date of termination of employment. However, the Committee may, but is not required to, waive any requirements made pursuant to Section 1.5(b) so that some or all of the shares subject to the Option may be exercised within the time limitation described in this subsection. An Optionee's employment shall be deemed to terminate on the last date for which he receives a regular wage or salary payment. (d) Death or Disability. Upon termination of an Optionee's employment by reason of death or disability (as determined by the -4- Committee consistent with the definition of Section 422A(c)(7) of the Code), the Option shall expire unless exercised upon the earlier of the expiration of (i) 12 months of the date of such termination, or (ii) the Term specified in Section 2.1 or 3.1(a) as the case may be. The Optionee or his successor in interest, as the case may be, may exercise the Option only as to the shares which could have been purchased by the Optionee at the date of his termination of employment. However, the Committee may, but is not required to, waive any requirements made pursuant to Section 1.5(b) so that some or all of the shares subject to the Option may be exercised within the time limitation described in this subsection. (e) Payment. Payment for shares as to which an Option is exercised shall be made in such manner and at such time or times as shall be provided in the option agreement, including cash, Common Stock of the Company which was previously acquired by the Optionee, or any combination thereof. The Fair Market Value of the surrendered Common Stock as of the date of exercise shall be determined in valuing Common Stock used in payment for Options. (f) Nontransferability. No Option granted under the Plan shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee. (g) Additional Provisions. Each option agreement may contain such other terms and conditions not inconsistent with the provisions of the Plan as the Committee may deem appropriate from time to time. 1.6 Stock Adjustments; Mergers. Notwithstanding Section 1.4, in the event the outstanding shares are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of any other corporation by reason of any merger, sale of stock, consolidation, liquidation, recapitalization, reclassification, stock split up, combination of shares, or stock dividend, the total number of shares set forth in Section 1.4 shall be proportionately and appropriately adjusted by the Committee. If the Company continues in existence, (i) the number and kind of shares that are subject to any Option and the option price per share shall be proportionately and appropriately adjusted without any change in the aggregate price to be paid therefor upon exercise of the Option, and (ii) the Committee may make such adjustments in the number and kind of Stock Appreciation Rights as it shall deem appropriate in the circumstances. If the Company will not remain in existence or substantially all of its voting Common Stock and Common Stock will be purchased by a single purchaser or group of purchasers acting together, then the Committee may (i) declare that all Options and -5- Stock Appreciation Rights shall terminate 30 days after the Committee gives written notice to all Optionees of their immediate right to exercise all Options and Stock Appreciation Rights then outstanding (without regard to limitations on exercise otherwise contained in the Options), or (ii) notify all Optionees that all Options and Stock Appreciation Rights granted under the Plan shall apply with appropriate adjustments as determined by the Committee to the securities of the successor corporation to which holders of the numbers of shares subject to such Options and Stock Appreciation Rights would have been entitled, or (iii) some combination of aspects of (i) and (ii). The determination by the Committee as to the terms of any of the foregoing adjustments shall be conclusive and binding. Any fractional shares resulting from any of the foregoing adjustments under this section shall be disregarded and eliminated. 1.7 Acceleration Event. If an Acceleration Event occurs in the opinion of the Board of Directors, based on circumstances known to it, the Board of Directors may direct the Committee to declare that all Options and Stock Appreciation Rights granted under the Plan shall become exercisable immediately notwithstanding the provisions of the respective Option agreements regarding exercisability. 1.8 Notification of Exercise. Options shall be exercised by written notice directed to the Secretary of the Company at the principal executive offices of the Company. Such written notice shall be accompanied by any payment required pursuant to Section 1.5(e). Exercise by an Optionee's heir or the representative of his estate shall be accompanied by evidence of his authority to so act in form reasonably satisfactory to the Company. ARTICLE II INCENTIVE STOCK OPTIONS 2.1 Terms of Incentive Stock Options. Each Incentive Stock Option granted under the Plan shall be exercisable only during a Term fixed by the Committee; provided, however, that the Term shall end no later than 10 years after the date the Incentive Stock Option is granted. 2.2 Limitation on Options. The aggregate Fair Market Value of Common Stock (determined at the time the Incentive Stock Option is granted) subject to Incentive Stock -6- Options granted to a Key Employee under all plans of the Key Employee's employer corporation and its Parent or Subsidiary corporations and that become exercisable for the first time by such Key Employee during any calendar year may not exceed $100,000. 2.3 Continued Employment. Whether military, government or other service or other leave of absence shall constitute a termination of employment shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive. A termination of employment shall not occur where the Optionee transfers from the Company to one of its Subsidiaries or transfers from a Subsidiary to the Company. 2.4 Special Rule for Ten Percent Shareholder. If at the time an Incentive Stock Option is granted, and employee owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of his employer corporation or of its Parent or any of its Subsidiaries, as determined using the attribution rules of Section 425(d) of the Code, then the terms of the Incentive Stock Option shall specify that the option price shall be at least 110% of the Fair Market Value of the stock subject to the Incentive Stock Option and such Incentive Stock Option shall not be exercisable after the expiration of five years from the date such Incentive Stock Option is granted. 2.5 Interpretation. In interpreting this Article II of the Plan and the provisions of individual option agreements, the Committee and the Board shall be governed by the principles and requirements of Sections 421, 422A and 425 of the Code, and applicable Treasury Regulations. ARTICLE III NONQUALIFIED STOCK OPTIONS 3.1 Terms and Conditions of Options. In addition to the requirements of Section 1.5, Nonqualified Stock Options shall be subject to the following provisions: (a) Term. Each Nonqualified Stock Option granted under the Plan shall be exercisable only during a Term fixed by the Committee. (b) Termination of Employment. Notwithstanding the provisions of Sections 1.5(c) and 1.5(d), the Stock Option Committee in its discretion -7- may provide, either upon the original grant of an Option or in an amendment to an Incentive or Nonqualified Stock Option, that an Option may be exercisable during a Term that does not expire upon the expiration of three months following an Optionee's termination of employment (one year in the case of termination as a result of death or disability), but in no event later than the Term specified in Section 3.1(a) above. (c) Exercise Price. The Company may elect to grant Nonqualified Stock Options at a price less than the Fair Market Value of the Common Stock at the time the Option is granted but in no event less than the par value of the Common Stock. 3.2 Section 83(b) Election. The Company recognizes that certain persons who receive Nonqualified Stock Options may be subject to restrictions regarding their right to trade Common Stock under applicable securities laws. Such may cause Optionee's exercising such Options not to be taxable under the provisions of Section 83(c) of the Code. Accordingly, Optionees exercising such Nonqualified Stock Options may consider making an election to be taxed upon exercise of the Option under Section 83(b) of the Code and to effect such election will file such election with the Internal Revenue Service within thirty (30) days of exercise of the Option and otherwise in accordance with applicable Treasury Regulations. ARTICLE IV STOCK APPRECIATION RIGHTS 4.1 Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights ("SAR") may be, but are not required to be, granted by the Committee in connection with grant of an Option. All SARs shall be in such form as the Committee may from time to time determine and shall be subject to the following terms and conditions: (a) Term and Exercise. An SAR shall be exercisable only (i) with the approval of the Committee, (ii) during the Term of the Option to which it relates, (iii) at such times as the Option to which it relates is exercisable, and (iv) if the Fair Market Value of the Common Stock subject to the Option surrendered (on the date surrendered) minus the aggregate option price of the Common Stock subject to the Option surrendered is a positive amount. (b) Payment. In the event the Committee agrees to permit exercise of the SAR, the Optionee shall surrender to the Company the right to exercise the Option with respect to a specified number of shares as to -8- which the Option is then exercisable. In return, the Optionee shall receive from the Company no more than an amount payable in cash and/or in shares (as determined by the Committee after considering the request of the Optionee) equal to the difference between the Fair Market Value of Common Stock as to which the Optionee has surrendered the Option and the exercise price with respect thereto. In the event the Committee determines to tender shares in full or partial payment of the SAR, the number of shares to be issued to the Optionee shall be based on the Fair Market Value of the shares as of the date of exercise of the SAR. No fractional shares shall be issued to Optionees upon exercise of an SAR. Instead, the Company shall pay the Optionee the value of such fractional share based upon the Fair Market Value of a share on the date the SAR is exercised. (c) Nontransferability. An SAR granted under the Plan shall be transferable only when the Option to which it relates is transferable. 4.2 Other Terms and Conditions. Option agreements reflecting Stock Appreciation Rights which are granted under the Plan may contain such other conditions not inconsistent with the provisions of the Plan as the Committee may deem appropriate from time to time. 4.3 Notification of Request to Exercise. The Optionee shall request the Committee's approval to exercise a Stock Appreciation Right by written notice to the Secretary of the Company at the principal executive offices of the Company. Such written notice shall state the number of shares subject to the Option for which approval of the exercise of the SAR is requested and the Optionee's preferred form of payment of the SAR, as hereinafter provided. The Optionee may indicate his or her preference to receive payment of the SAR in cash or in Common Stock or in a combination thereof. Notwithstanding anything to the contrary contained herein, the Committee shall have absolute discretion in determining whether the request for approval of the exercise of the SAR shall be approved and, if such approval is given, whether payment shall be made in cash or Common Stock or in a combination thereof. Within 30 days after the delivery to the Secretary of the Optionee's request to exercise the SAR as provided above, the Committee shall inform the Optionee in writing of its determination by personal delivery of such written determination to the Optionee or by mailing its written determination to the Optionee by certified or registered mail, return receipt requested. The Optionee must act on any approved exercise of an SAR within 30 days after the date of such determination by the Committee (or such longer period as may be permitted by the Committee) and in -9- accordance with the terms approved by the Committee. Exercise shall be by written notice actually delivered, or mailed by certified or registered mail, return receipt requested, to the Secretary of the Company at the principal executive offices of the Company. 4.4 Effect of Exercise. Upon exercise of a Stock Appreciation Right, the Option to which it relates shall lapse with respect to the shares as to which the SAR is exercised and such shares shall not be available for further grant of Options. ARTICLE V ADDITIONAL PROVISIONS 5.1 Stockholder Approval. The Plan shall be submitted for the approval of the stockholders of the Company at the first annual meeting of stockholders held subsequent to or coincident with the adoption of the Plan and in all events within one year of its approval by the Board of Directors. If at said meeting the stockholders of the Company do not approve the Plan, the Plan shall terminate. 5.2 Compliance with Other Laws and Regulations. The Plan, the grant and exercise of Options hereunder, and the obligation of the Company to sell and deliver shares under such Options, shall be subject to all applicable Federal and state laws, rules, and regulations and to such approvals by any government or regulatory agency as may be required. The Company shall not be required to issue or deliver any certificates for shares of Common Stock prior to (a) the listing of such shares on any stock exchange on which the Common Stock may then be listed and (b) the completion of any registration or qualification of such shares under any Federal or state law, or any ruling or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable. 5.3 Amendments. The Board of Directors may discontinue the Plan at any time, and may amend it from time to time, but no amendment, without approval by stockholders, may (a) increase the total number of shares which may be issued under the Plan or to any individual under the Plan, (b) reduce the Option price for shares which may be purchased pursuant to Options under Articles II and III of the Plan, (c) extend the period during which Options may be granted, or (d) change the class of employees to whom Options may be granted, except as provided in Section 1.6. Other -10- than as expressly permitted under the Plan, no outstanding Option may be revoked or altered in a manner unfavorable to the Optionee without the consent of the Optionee. 5.4 No Rights As Shareholder. No Optionee shall have any rights as a shareholder with respect to any share subject to his or her Option prior to the date of issuance to him or her of a certificate or certificates for such shares. 5.5 Withholding. Whenever the Company proposes or is required to issue or transfer shares of Common Stock under the Plan, the Company shall have the right to require the Optionee to remit to the Company an amount sufficient to satisfy any Federal, state or local withholding tax liability prior to the delivery of any certificate or certificates for such shares. Whenever under the Plan payments are to be made in cash, such payments shall be made net of an amount sufficient to satisfy any Federal, state, or local withholding tax liability. 5.6 Continued Employment Not Presumed. This Plan and any document describing this Plan and the grant of any stock Option or Stock Appreciation Right hereunder shall not give any Optionee or other employee a right to continued employment by the Company or its Subsidiaries or affect the right of the Company or its Subsidiaries to terminate the employment of any such person with or without cause. 5.7 Effective Date; Duration. The Plan shall become effective as of the consummation of the Reorganization subject to stockholder approval pursuant to Section 5.1 and shall expire on March 31, 1997. No Options may be granted under the Plan after March 31, 1997, but Options granted on or before that date may be exercised according to the terms of the option agreements and shall continue to be governed by and interpreted consistent with the terms hereof. -11- EX-99 10 EXHIBIT 99.8 The Merchant Bank of Atlanta Incentive Stock Option Plan 1. Purpose. The Purpose of The Merchant Bank of Atlanta Incentive Stock Option Plan (the "Plan") is to advance the interests of The Merchant Bank of Atlanta (the "Bank") by encouraging and enabling present and future key employees of the Bank and any parent or subsidiary to acquire a financial interest in the Bank through incentive stock options under the Plan. The Bank believes that the Plan will also aid the Bank and any parent or subsidiary in attracting and retaining outstanding key employees and in stimulating the efforts of such employees to work for the success of the Bank. 2. Administration. (a) General. The Plan shall be administered, construed and interpreted by the Compensation Committee (the "Committee") of the Board of Directors. In the event that there is not a Committee established at any time during the term of any option granted thereunder, references herein to the Committee shall be interpreted to be references to the Board of Directors. (b) Grant of Options. The Committee shall from time to time recommend the persons who shall participate in the Plan and the extent of their participation. The Committee also shall recommend the price to be paid for shares upon the exercise of options granted under the Plan, the period within which each option may be exercised, and the terms and conditions of each individual Stock Option Plan Agreement by and between the Bank and the holder of the option. The terms and conditions of each Individual Stock Option Agreement shall be consistent with the provisions of the Plan, but the Committee may provide for such additional terms and conditions, not to conflict with the provisions of the Plan, as it deems advisable. All such recommendations by the Committee shall be final upon approval of the Board of Directors. (c) Interpretation of Plan. In interpreting the Plan, the Committee and Board of Directors shall be governed by the principals and requirements of sections 421, 422A, 425 and related sections of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations applicable to the incentive stock options and incentive stock option plans. Where applicable, unless otherwise defined, a parent corporation in an unbroken chain of corporations ending with the Bank if, at the time the option is granted, each of the corporations other than the Bank owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in the chain. A subsidiary corporation is any corporation in an unbroken chain of corporations beginning with the Bank if, at the time the option is granted, each of the corporations, other than the last corporation in the unbroken chain, owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in the chain. Such definitions of parent and the subsidiary shall be consistent with the definitions of such terms as set forth in Code section 425 (f). All other terms used herein shall have and shall be interpreted as having the meanings set forth in the applicable provisions of the Code. The interpretation and construction by the Committee of any provision of or term used in the Plan or any option granted under the Plan and any determination pursuant to any provision of the Plan or any such option shall be final and conclusive, unless otherwise determined by the Board of Directors. No member of the Committee or Board of Directors shall be liable for any action or determination made in good faith, and members of the Committee and Board of Directors shall be entitled to indemnification and reimbursement from time to time for expenses incurred in defense of such good faith action or determination. 3. Eligibility. Options under the Plan may be granted to key senior officers, key officers and other key employees of the Bank or of one or more of any future parents or subsidiaries of the Bank who, in the opinion of the supervision of the business of the Bank or its parents or subsidiaries. Options may be granted under the Plan only to persons who are employed by the Bank or one of its parents or subsidiaries at the time of the grant. The fact that an employee is a member of the Board of Directors of the Bank shall not make him ineligible for an option grant unless the vote is required to secure a majority vote in favor of the grant of his option. For purposes of the Plan, a person to whom an option is granted under the Plan shall be referred to as "Grantee". 4. Shares Subject to Plan. The shares subject to the Plan shall be authorized but unissued or treasury shares of the Bank's One Dollar ($1.00) par value Common Stock (the "Common Stock"). Subject to readjustments in accordance with the provisions of paragraph 6 of the Plan, the maximum number of shares of Common Stock for which options may be granted under the Plan shall be One Hundred Thousand (100,000), and the adoption of the Plan by the Board of Directors of the Bank shall constitute a reservation of One Hundred Thousand (100,000) shares of Common Stock for issuance only upon the exercise of options granted under the Plan for any reason expires or is terminated prior to the end of the period during which options may be granted under the Plan, the shares of Common Stock allocable to the unexercised portion of such option may again be subject in whole or in part to any option granted under the Plan. 5. Terms and Conditions of Options. Options granted pursuant to the Plan shall be evidenced by agreements (the "Stock Option Agreements") in such form as the Committee and Board of Directors shall, consistent with the provisions of Code sections 421, 422A, 425 and related sections of the Code and applicable Treasury Regulations, approve from time to time. Such Stock Option Agreements and the options evidenced thereby shall comply with and be subject to the following terms and conditions: (a) Number of Shares. Each Stock Option Agreement shall state the total number of shares of Common Stock to which it pertains. (b) Amount Limitation. A key employee may not be granted incentive stock options which are exercisable for the first time in any one calendar year under the Plan and any other incentive stock option plan of the Bank or any parent or subsidiary corporation of the Bank, for the purchase of Common Stock with an aggregate fair market value of more than One Hundred Thousand Dollars ($100,000) (valued as of the date of grant of the option). (c) Option Price. The options for each option granted under the Plan shall be the amount determined by Board of Directors, upon the recommendations of the Committee, but, subject to the provisions of paragraph 5 (k) of the Plan, shall not be less than One Hundred percent (100%) of the fair market value of the shares of Common Stock subject to the option on the date of grant of the option. The date on which the Board of Directors approves the granting of an option shall be considered the date on which such option is granted. For purposes of the Plan, the "fair market value" of the shares of Common Stock shall be the mean between the high "bid" and the low "asked" prices of Common Stock in the over-the-counter market on the day on which such value is to be determined or, if no shares were traded on such day, on the next preceding day on which shares were traded, as reported. If the Common Stock is not regularly traded in the over- the-counter market but is registered on a national securities exchange, the "fair market value" of the shares of Common Stock mean the closing price of the Common Stock on such national securities exchange on the day on which such value is to be determined of, if no shares were traded on such day, on the next preceding day on which shares were traded, as reported by National Quotation Bureau, Incorporated or other national quotation service. If the Common Stock is not regularly traded in the over-the-counter market or registered in a national securities exchange the Committee shall determine the fair market value of the common stock in good faith in accordance with Code section 422(c) (1) and accompanying Treasury Regulations. (d) Medium and Time of Payment. The option price shall be payable upon the exercise of an option in cash or by check or, if provided in the Stock Option Agreement, in shares of Common Stock owned by the Grantee. In the event that all or part of the option price is paid in shares of Common Stock, the value of such shares shall be equal to the fair market value of such shares on the date of exercise of the option (determined as provided in paragraph 5(c) of the Plan, and the Grantee shall deliver to the Bank a certificate or certificates representing such shares duly endorsed to the Bank or accompanied by a duly-executed separate instrument of transfer satisfactory to the Committee. (e) Term and Exercise. Except as set forth in paragraph 5(j) of the Plan each option granted under the Plan shall be exercisable by the Grantee only during a term fixed by the Board of Directors upon recommendation of the Committee ending not later than ten (10) years after the date of grant of the option. The Board of Directors upon recommendation of the Committee shall determine whether the option shall be exercisable in full at any time during the term or in cumulative or non-cumulative installments during the term. (f) Method of Exercise. All options granted under the Plan shall be exercised by written notice directed to the officer of the Bank indicated in the Stock Option Agreement at the Bank's principal place of business. Such written notice shall specify the form of payment made by the Grantee or his successor as provided by paragraph 5(d) of the Plan shall be accompanied by payment in full of the option price for the shares for which such option is being exercised. The Bank shall make delivery of certificates representing the shares for which an option has been exercised within a reasonable period of time; provided, however, that if any law, regulation or agreement requires the Bank to take any action with respect to the shares for which an option has been exercised before the issuance thereof, then the date of delivery of such shares shall be extended for the period necessary to take such action. (g) Effect of Termination of Employment or Death. (A) Termination of Employment. Except as otherwise provided in this subparagraph (A) or in subparagraph (B) below upon termination of employment of any Grantee with the Bank or any parent or subsidiary corporation of the Bank for any reason, all options held by the Grantee under the Plan shall immediately terminate. Whether military, government or other service leave of absence shall constitute a termination of employment shall be determined in each case by the Committee in its discretion, and any determination by the Committee shall be final and conclusive. The Board of Directors upon recommendation of the Committee at its election may provide any Stock Option Agreement that the Grantee may exercise an option at any time within three (3) months after termination of employment of the Grantee with the bank or any parent or subsidiary corporation then employing Grantee (or within one (1) year after the termination of such employment if such employment is terminated due to the Grantee's permanent disability). In no event, however, will the option be exercisable after the expiration of the term of the option. In addition, exercise of the option following terms and conditions: (i) with respect to any and all installments of the option that had not become exercisable at the time of termination of employment, the period of extension shall not, unless otherwise provided in the Stock Option Agreement, operate to permit such installment to become exercisable within such period; and (ii) with respect to any installment of the option that had become exercisable at the time of termination of employment, the period of extension shall not operate to permit the exercise of such installment may be exercised. For purposes of this subparagraph (A), if any corporation ceases to be parent or subsidiary of the Bank, the employment of any Grantee employed by such corporation shall be deemed to have terminated unless such Grantee becomes an employee of the Bank or another parent or subsidiary of the Bank simultaneously with or prior to the time such corporation ceases to be a parent or subsidiary of the Bank. For purposes of the Plan, "permanent disability" shall mean a permanent disability defined in Code section 105(d) (4). (B) Death. In granting any option under the Plan, the Board of Directors and Committee may provide in the Stock Option Agreement representing such option that in the event of the death of a grantee at a time when an option is exercisable by the Grantee, the Grantee's personal representatives, heirs or legatees (the "Grantee's Successors") may exercise all or any portion of such option held by the Grantee on the date of his death upon proof satisfactory to the Bank of their authority. The Grantee's Successors must exercise any such option within twelve (12) months after the date of expiration of the option. Such exercise otherwise shall be subject to the terms and conditions of the Plan; provided, however, that with respect to any installment of the option that had not become exercisable on the date of the Grantee's death, the period of extension shall not, unless otherwise provided in the Option Agreement, operate to permit such installment to become exercisable within such period. (h) Nonassignability of Option Rights. No option shall be assignable or transferable by the Grantee except by will or by the laws of descent and distribution. During the lifetime of the Grantee, the option shall be exercisable only by the Grantee. (i) Rights as Stockholder. Neither the Grantee nor the Grantee's Successors shall have rights as a stockholder of the Bank with respect to shares of Common Stock covered by the Grantee's option until the Grantee or the Grantee's Successors become the holder of record of such shares. Except as specified in paragraph 6 of the Plan, no adjustment will be made for dividends or other rights for which the record date is prior to the date on which shares are issued upon exercise of an option. (j) No Options in Certain Cases. Except as set forth in paragraph 5(j) of the Plan, no options shall be granted except within period of ten (10) years after the effective date of the Plan. In no event shall an option be granted to any person who, at the time such option is granted, owns (as defined in Code sections 422A and 425) stock possessing more than ten percent (10%) of the total combined voting power or value of all classes of stock of the Bank or any parent or subsidiary corporation of the Bank unless (i) the option price under such option is not less than one hundred and ten percent (110%) of the fair market value of the shares of Common Stock subject to such option on the date of grant of such option (determined as provided in paragraph 5(c) of the Plan and (ii) the terms of the Stock Option Agreement shall make such option expire on the date that is the fifth (5th) anniversary after the date on which the option is granted. (k) Miscellaneous Provisions. The Stock Option Agreements authorized under the Plan may contain such other provisions, not inconsistent with the Plan or the applicable provisions of the Code as the Committee shall deem advisable. 6. Adjustments. (a) Recapitalization. In the event that, after the effective date of the Plan, the outstanding shares of Common Stock are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the bank by reason of a recapitalization, reclassification, stock split-up, combination of shares, or dividend payable in stock, appropriate adjustments shall be made by the Committee in the number and kind of shares or other securities for which options may be granted under the Plan. In addition, the Committee upon the occurrence of such an event shall make appropriate adjustments in the number and kind of shares or other securities as to which outstanding options, or portions thereof then unexercised, shall be exercisable, so that each Grantees's proportionate interest shall be maintained as before the occurrence of such event. Such adjustment in outstanding options shall be made without change in the total price applicable to the unexercised portion of each option and with corresponding adjustment in the option price per share. Any fractional shares resulting from any of the foregoing adjustments under this subparagraph (a) shall be disregarded and eliminated. Each adjustment under this subparagraph (s) shall be made in such a manner that such adjustment will not constitute a "modification" as defined in Code section 425. All adjustments made by the Committee (unless otherwise determined by the Board of Directors) under this subparagraph (a) shall be final and conclusive. (b) Reorganizations; Liquidations. If the Bank shall be a party to any reorganizations involving a merger, consolidation or acquisition of the stock or the assets of the Bank, the Committee, in its discretion, may: (A) Declare that all options granted under the Plan shall become exercisable immediately notwithstanding the provisions of the respective Stock Option Agreements regarding exercisability and that all options shall terminate thirty (30) days after the Committee gives written notice to all Grantees of their immediate right to exercise all options then outstanding and of the Committee's decision to terminate all options not exercised within such thirty-day period; or (B) Notify all Grantees that all options granted under the Plan shall apply with appropriate adjustments as determined by the Committee to the securities of the resulting corporation to which holders of the number of shares of Common Stock subject to such options would have been entitled. The adoption of a plan of dissolution or liquidation by the Board of Directors and the stockholders of the Bank shall 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 stockholders; provided, however, that the Committee, in its discretion, may declare that all options granted under the Plan shall exercisable immediately notwithstanding the provisions of the respective Stock Option Agreements regarding exercisability; and provided further that in the event of the adoption of a plan of dissolution or liquidation in connection with a reorganization as described in the first sentence of this subparagraph (b), outstanding options shall be governed by and be subject to the provisions of such sentence. (c) Rights or Warrants. If any rights or warrants to subscribe for additional shares are given pro rata to holders of outstanding shares of the Common Stock, each Grantee under the Plan shall be entitled to the same rights or warrants on the same basis as holders of the outstanding shares with respect to such portion of the Grantee's option that may be exercised on or prior to the date of the expiration of such rights or warrants. 7. Effective Date and Termination of Plan. (a) Effective Date. The effective date of the Plan shall be February 16, 1989, the date of its adoption by the Board of Directors of the Bank, provided that the stockholders of the Bank (acting at a duly called meeting of the stockholders) shall approve before January 1, 1990. (b) Termination. The Plan shall terminate ten (10) years after its effective date, but the Board of Directors may terminate the Plan at any time prior to such date. Termination of the Plan shall not alter or impair any of the rights or obligations under any option theretofore granted under the Plan unless the Grantee shall consent. 8. Application of Funds. The proceeds received by the Bank from the sale of Shares of Common Stock pursuant to options granted under the Plan will be used for general corporate purposes. 9. No Obligation to Exercise Option. The granting of an option shall impose no obligation upon the Grantee to exercise such option. 10. Amendment. The Board of Directors of the Bank by majority vote may at any time and from time to time amend the Plan in such respects as it shall deem advisable in order that options granted under the Plan shall be "incentive stock options" as defined in Code section 422A, or to conform to any change in the law, or for any other purpose; provided, however, that without the approval of the stockholders of the Bank, no such amendment shall change: (a) The maximum number of shares of Common Stock as to which options may be granted under the Plan (except by operation of the adjustment provisions of the Plan); or (b) The date on which the Plan will terminate as provided by paragraph 7(b) of the Plan; or (c) The minimum option price as provided under paragraph 5(c) of the Plan, other than to change the manner of determining the fair market value of the Common Stock to conform with any provisions of the Internal Revenue Code or Treasury Regulations thereunder applicable to incentive stock options or if such change is necessitated by a change in the manner in which Common Stock is traded; or (d) The period during which options may be granted as provided in paragraph 5(j) of the Plan (provided, however, that the Board of Directors of the Bank shall have the power set forth in paragraph 7(b) to terminate the Plan); or (e) The provisions of paragraph 3 of the Plan, relating to the determination of employees to whom options may be granted. Any amendment to the Plan shall not, without the written consent of the Grantee, affect such Grantee's rights under any option theretofore granted to such Grantee. EX-99 11 EXHIBIT 99.9 BANK SOUTH CORPORATION 1994 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS 1. Purpose. The purpose of the Bank South 1994 Stock Option Plan for Outside Directors (the "Plan") is to advance the interests of Bank South Corporation (the "Company") by encouraging ownership of the Company's $5.00 par value common stock (the "Common Stock") by non-employee directors of the Company, thereby giving such directors an increased incentive to devote their efforts to the success of the Company. 2. Administration. Grants of options under this Plan are automatic. This Plan is intended to be a "formula plan" as recognized by Rule 16b-3(c)(2)(ii) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall be interpreted accordingly. 3. Eligibility. Except as provided otherwise in this Paragraph 3, options under the Plan shall be granted in accordance with Paragraph 5 to each member of the Company's Board of Directors who is not an employee of the Company (an "Outside Director"); provided that shares of the Company's Common Stock remain available for grant hereunder in accordance with Paragraph 4. An Outside Director to whom an option is granted under the Plan shall be referred to hereinafter as a "Grantee." 4. Shares Subject to Plan. The shares subject to the Plan shall be authorized but unissued or reacquired shares of the Company's Common Stock. Subject to adjustment in accordance with the provisions of Paragraph 6 of the Plan, the maximum number of shares of Common Stock for which options may be granted under the Plan shall be 300,000 and the initial adoption of the Plan by the Board of Directors of the Company shall constitute a reservation of 300,000 authorized but unissued, or reacquired, shares of Common Stock for issuance only upon the exercise of options granted under the Plan. In the event that any outstanding option granted under the Plan for any reason expires or is terminated prior to the end of the period during which options may be granted under the Plan, the shares of Common Stock allocable to the unexercised portion of such option may again be subject in whole or in part to any option granted under the Plan. 5. Terms and Conditions of Options. Options granted pursuant to the Plan shall be evidenced by Stock Option Agreements in such form as shall comply with and be subject to the following terms and conditions: (a) Grant. Each Outside Director who is serving in such capacity as of the day following the 1994 annual meeting of the Company's shareholders ("Annual Meeting") shall be granted an option to purchase 2,000 shares of the Company's Common Stock, subject to adjustment as provided in Section 6. As of the day following each subsequent Annual Meeting, each Outside Director who is serving in such capacity as of such date shall be granted an option to purchase 2,000 shares Common Stock, subject to adjustment pursuant to Section 6. Each such day that options are to be granted under the Plan is referred to hereinafter as a "Grant Date." If on any Grant Date, shares of Common Stock are not available under this Plan to grant to Outside Directors the full amount of a grant contemplated by the immediately preceding paragraph, then each Outside Director shall receive an option (a "Reduced Grant") to purchase shares of Common Stock in an amount equal to the number of shares of Common Stock then available under the Plan divided by the number of Outside Directors as of the applicable Grant Date. Fractional shares shall be ignored and not granted. If a Reduced Grant has been made and, thereafter, during the term of this Plan, additional shares of Common Stock become available for grant (e.g., because of the forfeiture or lapse of an option), then each person who was an Outside Director both on the Grant Date on which the Reduced Grant was made and on the date additional shares of Common Stock become available (a "Continuing Outside Director") shall receive an additional option to purchase shares of Common Stock. The number of newly available shares shall be divided equally among the options granted to the Continuing Outside Directors; provided, however, that the aggregate number of shares of Common Stock subject to a Continuing Outside Director's additional option plus any prior Reduced Grant to the Continuing Outside Director on the applicable Grant Date shall not exceed 2,000 shares of Common Stock (subject to adjustment pursuant to paragraph 6). If more than one Reduced Grant has been been made, available options shall be granted beginning with the earliest such Grant Date. (b) Option Price. The option price for each option granted under the Plan shall be the Fair Market Value (as defined below) of the shares of Common Stock subject to the option on the date of grant of the option. For purposes of the Plan, the "Fair Market Value" of the shares of Common Stock shall mean the closing "asked" price of the shares in the over-the-counter market on the day on which such value is to be determined or, if such "asked" price is not available, the last sales price on such day or, if no shares were traded on such day, on the next preceding date on which the shares were traded, as reported by the National Association of Securities Dealers Automatic Quotation System (NASDAQ) or other national quotation service. If the shares are listed on a national securities exchange, "Fair Market Value" means the closing price of the shares on such national securities exchange on the day on which such value is to be determined or, if no shares were traded on such day, on the next preceding day on which shares were traded, as reported by National Quotation Bureau, Inc. or other national quotation service. (c) Medium and Time of Payment. The option price shall be payable in full upon the exercise of an option in cash or by check. To the extent permitted under Regulation T of the Federal Reserve Board, and subject to applicable securities laws, options may be exercised through a broker in a so-called "cashless exercise" whereby the broker sells the option shares and delivers cash sales proceeds to the Company in payment -2- of the exercise price. However, to avoid short-swing profit liability under Section 16(b) of the Exchange Act, the Grantee should not engage in a cashless exercise within six months of the date of grant. In no event may shares of Common Stock be used as payment of the exercise price of the option. (d) Term. Each option granted under the Plan shall, to the extent not previously exercised, terminate and expire on the date five (5) years after the date of grant of the option, unless earlier terminated as provided hereinafter in Section 5(g). (e) Exercisability. Each option granted under this Plan shall be immediately exercisable, in whole or in part. However, to avoid short-swing profit liability under Section 16(b) of the Exchange Act, the Grantee should wait at least six (6) months from the date of grant of the option before selling the underlying shares. (f) Method of Exercise. All options granted under the Plan shall be exercised by an irrevocable written notice directed to the Secretary of the Company at the Company's principal place of business. Except in the case of a "cashless exercise" through a broker, such written notice shall be accompanied by payment in full of the option price for the shares for which such option is being exercised. In the case of a "cashless exercise," payment in full of the option price for the shares for which such option is being exercised shall be paid in cash by the brokerage from the sale proceeds. The Company shall make delivery of certificates representing the shares for which an option has been exercised within a reasonable period of time; provided, however, that if any law, regulation or agreement requires the Company to take any action with respect to the shares for which an option has been exercised before the issuance thereof, then the date of delivery of such shares shall be extended for the period necessary to take such action. Certificates representing shares for which options are exercised under the Plan may bear such restrictive legends as may be necessary or desirable in order to comply with applicable federal and state securities laws. Nothing contained in the Plan shall be construed to require the Company to register any shares of Common Stock underlying options granted under this Plan. (g) Effect of Termination of Directorship or Death. (i) Termination of Directorship. Upon termination of any Grantee's membership on the Board of Directors of the Company for any reason other than for cause of death, the options held by the Grantee under the Plan shall terminate ninety (90) days following the date of termination of the Grantee's membership on the Board or, if earlier, on the date of expiration of the options as provided by Paragraph 5(d) of the Plan. If the Grantee exercises the options after termination of the Grantee's service on the Board of Directors, the Grantee may exercise the options only with respect to the shares that were otherwise exercisable on the date of termination of the Grantees' service on the Board. Such exercise otherwise shall be subject to the terms and conditions of the Plan. If the Grantee's membership on -3- the Board of Directors is terminated for cause, all options granted to such Grantee shall expire upon such termination. (ii) Death. In the event of the death of a Grantee, the Grantee's personal representatives, heirs or legatees (the "Grantee's Successors") may exercise the options held by the Grantee on the date of death, upon proof satisfactory to the Company of their authority. The Grantee's Successors must exercise any such options within one (1) year after the Grantee's death or in any event prior to the date on which the options expire as provided by Paragraph 5(d) of the Plan. Such exercise otherwise shall be subject to the terms and conditions of the Plan. (h) Nonassignability of Option Rights. No option shall be assignable or transferable by the Grantee except by will, by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined in Title I of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986. During the lifetime of the Grantee, the option shall be exercisable only by the Grantee. (i) Rights as Shareholder. Neither the Grantee nor the Grantee's Successors shall have rights as a shareholder of the Company with respect to shares of Common Stock covered by the Grantee's option until the Grantee or the Grantee's Successors become the holder of record of such shares. (j) No Options after Ten Years. No options shall be granted except within a period of ten (10) years after the effective date of the Plan. 6. Adjustments. (a) If any change is made in the stock subject to the Plan, or subject to any option granted under the Plan (through merger, consolidation, reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or otherwise), the Plan and outstanding options will be automatically and appropriately adjusted, including the maximum number of shares subject to the Plan and the number of shares and price per share of stock subject to outstanding options. (b) In the event of: (i) a merger or consolidation in which the Company is not the surviving corporation; (ii) a reverse merger in which the Company is the surviving corporation but the shares of the Company's common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash other otherwise; or (iii) any other capital reorganization in which more than fifty percent (50%) of the shares of the Company entitled to vote are exchanged, then any surviving corporation shall assume any options outstanding under the Plan or shall substitute similar options for those outstanding under the Plan. If there is no surviving corporation, all outstanding options shall expire. -4- 7. Effective Date and Termination of Plan. (a) Effective Date. If approved by the Board of Directors of the Company, the Plan shall become effective upon approval of the same by the shareholders of the Company no later than the first annual meeting of shareholders held after approval of the Plan by the Board of Directors (the "1994 Annual Meeting"). (b) Termination. The Plan shall terminate ten (10) years after its effective date, but the Board of Directors may terminate the Plan at any time prior to such date. Termination of the Plan shall not alter or impair any of the rights or obligations under any option theretofore granted under the Plan unless the Grantee shall so consent. 8. No Obligation to Exercise Option. The granting of an option shall impose no obligation upon the Grantee to exercise such option. 9. Amendment. The Board of Directors of the Company by majority vote may amend the Plan; provided, however, that without the approval of the shareholders of the Company, no such amendment shall change: (a) The maximum number of shares of Common Stock as to which options may be granted under the Plan (except by operation of the adjustment provisions of the Plan); or (b) The date on which the Plan will terminate as provided by Paragraph 7(b) of the Plan; or (c) The number of shares of Common Stock subject to each option; or (d) The option price as provided under Paragraph 5(b) of the Plan; or (e) The provisions of Paragraph 3 of the Plan relating to the determination of persons to whom options may be granted; or (f) The provisions of the Plan in such a manner so as to increase materially (within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended) the benefits accruing under the Plan. The provisions of the Plan determining (i) the persons eligible to receive grants of options, (ii) the timing of option grants, (iii) the number of shares subject to options, (iv) the exercise price of options, (v) the periods during which options are exercisable, and (vi) the dates on which options terminate, may not be amended more than once every six months other than to comport with changes in the Internal Revenue Code, the Employee Retirement Income Security Act of 1974, or the rules thereunder. -5- It is expressly contemplated that the Board may amend the Plan in any respect that the Board deems necessary to cause the Plan to meet the requirements of Rule 16b-3 (or any successor rule) under the Exchange Act and otherwise to comport with the provisions of such Act and the applicable regulations thereunder. Any amendment to the Plan shall not, without the written consent of the Grantee, affect such Grantee's rights under any option theretofore granted to such Grantee. -6- EX-99 12 EXHIBIT 99.10 STOCK OPTION PLAN 1. The Purpose of the Plan. This stock option (the "Plan") is intended to provide an opportunity for directors, officers and key employees of Gwinnett Bancshares, Inc. (the "Company"), Gwinnett Federal Savings and Loan Association ("Gwinnett Federal") and its subsidiaries, as subsidiaries are defined in section 425 of the Code(1) (its "subsidiaries"), to acquire shares of the Company's common stock. The Plan provides for the grant of incentive stock options, as defined in section 422A of the Code ("Incentive Stock Options"), and stock options not qualifying as Incentive Stock Options ("Non-Qualified Stock Options") as an incentive to service or continued service to the Company and its subsidiaries and to aid the Company in obtaining and retaining directors and key personnel of outstanding ability. As used herein, "Options" refers to both Incentive Stock Options and Non-Qualified Stock Options. 2. Stock Subject to the Plan. The maximum number of shares of the common stock, $1.00 par value, of the Company (the "Stock") which may be issued under Incentive Stock Options and Non-Qualified Stock Options granted under the Plan in the discretion of the Committee (as defined below) shall be a total of 190,000 shares of Stock. If an Option expires or terminates for any reason without being exercised in full, the unpurchased shares subject to such Stock Option shall again be available for purposes of the Plan. 3. Administration of the Plan. This Plan shall be administered by the Compensation Committee of the Board of Directors consisting of not less than three directors (the "Committee"). The Committee shall have full authority in its discretion to determine the directors, officers or key employees of the Company and its subsidiaries to whom Options shall be granted and the terms and provisions of Options, subject to the Plan. In making such determinations, the Committee may take into account the nature of the services rendered and to be rendered by the respective directors, officers and key employees, their present and potential contributions to the Company and any other factors which the Committee deems relevant. Subject to the provisions of the Plan, the Committee shall have full and conclusive authority to interpret the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the respective Option agreements (which need not be identical); and to make all other determinations necessary or advisable for the proper administration of the Plan. 4. Eligibility and Limits. Options may be granted only to directors, officers and key employees of the Company and its present or future subsidiaries. No Incentive Stock Option shall be granted to any person who, at the time such Option is granted, owns (as defined in sections 422A and 425 of the Code) Stock possessing more than 10% of the total combined voting power of all classes of Stock of the Company, and no Incentive Stock Option may be granted to a director not otherwise employed by the Company or a subsidiary of the Company. The aggregate fair market value (determined as of the time an Incentive Stock Option is granted) of the Stock with respect to which Incentive Stock Options can become exercisable for the first time by any person in any one calendar year under this Plan and under all other Plans of the Company (within the meaning of sections 422A and 425 of the Code) shall not exceed $100,000. 5. Incentive Stock Options and Non-Qualified Stock Options. At the time any Option is granted under this Plan, the Committee shall determine whether said Option is to be an Incentive Stock Option or a Non-Qualified Stock Option, and the Option shall be clearly identified as to its status as an Incentive Stock Option or a Non-Qualified Stock Option. The number of shares as to which Incentive Stock Options and Non-Qualified Stock Options shall be granted shall be determined by the Committee in its sole discretion, subject to the provisions of section 4 above with respect to the ___________ (1) The "Code" herein refers to the Internal Revenue Code of 1986 as amended. A-1 aggregate fair market value of the Stock for which an officer or employee shall be granted Incentive Stock Options in any calendar year and subject to the provisions of section 2 above as to the total number of shares for which both Incentive Stock Options and Non-Qualified Stock Options may be granted under the Plan. At the time any Incentive Stock Option granted under this Plan is exercised, the certificates representing the shares of Stock purchased pursuant to said Option shall be clearly identified as representing shares purchased upon exercise of an Incentive Stock Option. 6. Terms and Conditions of Options. Subject to the following provisions, all Options shall be in such form and upon such terms and conditions as the Committee in its discretion may from time to time determine. (a) Option Price. The Option price per share shall not be less than 100% of the fair market value per share of the Stock (as determined in good faith by the Committee) on the date the Option is granted, which shall be the date on which the Committee has approved the terms and conditions of a stock option agreement evidencing the Option and has determined the recipient of the Option and the number of shares covered by the Option and has taken all such other action as is necessary to complete the grant of the Option. (b) Option Terms. No Option shall be exercisable after the expiration of ten years from the date the Option is granted. (c) Payment. Payment for all shares purchased pursuant to exercise of an Option shall be made in cash. Such payment shall be made at the time that the Option or any part thereof is exercised, and no shares shall be issued until full payment therefor has been made. As such, the holder of an Option shall have none of the rights of a stockholder. (d) Conditions to Exercise of an Option. Subject to the provisions of subparagraph (g) below, no Option shall be exercisable until the holder shall have been employed by or served as a director of the Company or one of its subsidiaries for at least six months from the date of grant. (e) Nontransferability of Options. An Option shall not be transferable or assignable except by will or by the laws of descent and distribution and shall be exercisable, during the holder's lifetime, only by him/her. (f) Termination of Employment or Death. In the event of termination of employment or of a directorship of the holder for any reason other than death or disability, the holder may not exercise an Option more than three months after the date of such termination; provided, however, that no Option shall be exercised following the date of notice to the holder of termination of his/her employment by the Company or any of its subsidiaries for violation by him/her of any provision of any written employment contract between the Company or any of its subsidiaries and the holder. Upon any termination of employment of the holder by reason of disability, within the meaning of section 105(d)(4) of the Code, the holder may not exercise an Option later than twelve months after the date of such termination of employment. If the holder of an Option dies, such Option may be exercised (to the extent that the holder shall have been entitled to do so at the date of his/her death) by a legatee or legatees of the holder under his/her last will, or by his/her personal representatives or distributees, at any time during the twelve-month period following his/her death. Notwithstanding this subparagraph (f), no Option may be exercised more than ten years after the date on which such Option was granted. For purposes of this subparagraph (f), employment or a directorship of a holder shall not be deemed terminated so long as the holder is employed by, or a director of, a parent or subsidiary of the Company or by another corporation (or a parent or subsidiary corporation of such other corporation) which has assumed the Option of the holder in a transaction to which section 425(a) of the Code is applicable. (g) Limited Rights Of Exercise. Notwithstanding the provisions of subparagraph (d) above, but subject to the provisions of subparagraph (b) above, an Option may be exercised in any amount up to the full number of shares covered by the Option without regard to the date of grant of the Option if: (1) a tender offer or exchange offer has been made for shares of Stock, other than A-2 one made by the Company, provided that the corporation, person or other entity making such offer purchases or otherwise acquires shares of Stock pursuant to such offer; or (2) the stockholders of the Company have approved a definitive agreement (the "Agreement") to merge or consolidate with or into another corporation pursuant to which the Company will not survive or will survive only as a subsidiary of another savings bank or savings and loan association or bank holding company or other corporation or to sell or otherwise dispose of all or substantially all of its assets; or (3) any person or group (as such terms are defined in section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Act")), becomes the holder of 25% or more of the outstanding shares of Stock. If any of the events specified in this subparagraph (g) have occurred, the Option shall be fully exercisable: (x) in the event of (1) above, within a 30-day period commencing on the date of expiration of the tender offer or exchange offer; or (y) in the event of (2) above, within a 30-day period commencing on the date of approval by the shareholders of the Agreement; or (z) in the event of (3) above, within a 30-day period commencing on the date upon which the Company is provided a copy of Schedule 13D (filed pursuant to section 13(d) of the Act and rules and regulations promulgated thereunder) indicating that any person or group has become the holder of 25% or more of the outstanding shares of Stock or, if the Company is not subject to section 13(d) of the Act, within a 30-day period commencing on the date upon which the Company receives written notice that any person or group has become the holder of 25% or more of the outstanding shares of Stock. 7. Changes in Capitalization; Merger; Liquidation. The number of shares of Stock as to which Options may be granted, the number of shares covered by each outstanding Option, and the price per share in each outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock resulting from a subdivision or combination of shares or the payment of a stock dividend in shares of Stock to holders of outstanding shares of Stock or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company. If the Company shall be the surviving entity in any merger or consolidation, recapitalization, reclassification or shares or similar reorganization, the holder of each outstanding Option shall be entitled to purchase, at the same times and upon the same terms and conditions as are then provided in the Option, the number and class of shares of Stock or other securities which a holder of the number of shares of Stock subject to the Option at the time of such transaction would have been entitled to receive as a result of such transaction. In the event of any such changes in capitalization of the Company, the Committee may make such additional adjustments in the number and class of shares of Stock or other securities with respect to which outstanding Options are exercisable and with respect to which future Options may be granted as the Committee in its sole discretion shall deem equitable or appropriate, subject to the provisions of paragraph 8. A dissolution or liquidation of the Company or a merger or consolidation in which the Company is not the surviving corporation or in which the Company survives only as a subsidiary of another corporation shall cause each outstanding Option to terminate, except to the extent that another savings bank, savings and loan association or other legal entity assumes such Option or substitutes another Option therefor in a transaction to which section 424(a) of the Code is applicable. In the event of a change of the Company's shares of Stock into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be the Stock within the meaning of the Plan. Except as expressly provided in this paragraph 7, the holder of an Option shall have no rights by reason of any subdivision or combination of shares of Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of Stock of any class or by reason of any dissolution, liquidation, merger or consolidation or distribution to the Company's stockholders of assets or stock of another corporation, and any issue by the Company of shares of Stock of any class, or securities convertible into shares of Stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Stock subject to the Option. The existence of the Plan and the Options granted pursuant to the Plan shall not affect in any way the right or power of the Company to make or authorize any adjustment, reclassification, reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of debt or A-3 equity securities having preferences or priorities as to the Stock or the rights thereof, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its business or assets, or any other corporate act or proceeding. 8. Termination and Amendment of the Plan. The Plan shall terminate on the date ten years after adoption of the Plan by the Board of Directors, and no Option shall be granted under the Plan after that date, but Options granted before termination of the Plan shall remain exercisable thereafter until they expire or lapse according to their terms. The Plan may be terminated, modified or amended by the shareholders or the Board of Directors of the Company; provided, however, that: (a) no such termination, modification or amendment without the consent of the holder of an Option shall adversely affect his rights under such Option; and (b) any modification or amendment which would (1) increase the aggregate number of shares of Stock which may be issued under the Plan (other than an increase merely reflecting a change in capitalization such as a stock dividend or stock split), (2) modify the designation of individuals eligible to receive Options under the Plan, or (3) materially increase the benefits accruing to holders of Options granted or to be granted under the Plan, within the meaning of Rule 16b-3 issued by the Securities and Exchange Commission under the Act, as amended, shall be effective only if it is approved by the shareholders of the Company at the next annual meeting of shareholders after the date of adoption by the Board of Directors of such modification or amendment. 9. Approval by Shareholders. The Plan shall become effective when adopted by the Board of Directors, but no Option granted under the Plan shall become exercisable unless and until the Plan shall have been approved by the Company's shareholders. If such shareholder approval is not obtained within twelve months after the date of the Board's adoption of the Plan, any Options previously granted under the Plan shall terminate and no further Options shall be granted. Subject to this limitation, options may be granted under the Plan at any time after the effective date and before the date fixed for termination of the Plan. 10. Construction. All Incentive Stock Options to be granted hereunder are intended to comply with sections 422A and 425 of the Code, and all provisions of this Plan and all Incentive Stock Options granted hereunder shall be construed in such manner as to effectuate that intent. Adopted by the Board of Directors of Gwinnett Federal Savings and Loan Association on November 16, 1989. A-4 -----END PRIVACY-ENHANCED MESSAGE-----