S-8 POS 1 FORM S-8 As filed with the Securities and Exchange Commission on May 20, 1996 Registration No. 33-93276 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PALFED, INC. (Exact name of Registrant as specified in its charter) ____________________ South Carolina 57-0821295 (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.) 107 Chesterfield Street South 29801 Aiken, South Carolina (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) PALFED, INC. AMENDED AND RESTATED DIRECTORS STOCK PLAN (FULL TITLE OF THE PLAN) Howard M. Hickey, Jr. with copies to: Executive Vice President, General Charles M. Flickinger Counsel and Secretary Sutherland, Asbill & Brennan PALFED, Inc. 999 Peachtree Street, N. E. 107 Chesterfield Street South Atlanta, Georgia 30309-3996 Aiken, South Carolina 29801 (404) 853-8000 (803) 642-1400 (Name, address and telephone number, including area code, of agent for service) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Page 1 of ___ sequentially numbered pages. The Index to Exhibits is on page 7. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT This Post-Effective Amendment No. 1 to the PALFED, Inc. Form S-8 Registration Statement is being filed in connection with the amendment of the PALFED, Inc. Amended and Restated Directors Stock Plan (as amended and restated, the "Plan"), previously filed with the Securities and Exchange Commission on June 1, 1995 as Exhibit 4.0 to Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-8 (SEC File No. 33-48334). At the Annual Meeting of Shareholders of PALFED, Inc. (the "Company") held on April 23, 1996, the shareholders of the Company approved certain amendments to the Plan. The Plan, as amended as of April 23, 1996, is filed as Exhibit 4.0 to this Post-Effective Amendment No. 1 to the Company's Registration Statement on Form S-8 (SEC File No. 33-93276). ITEM 8. EXHIBITS 4.0 PALFED, Inc. Amended and Restated Directors Stock Plan, as amended as of April 23, 1996. 4.1 Restated Articles of Incorporation of PALFED, Inc., filed on July 1, 1993 as Exhibit 4.1 to the Registrant's Registration Statement on Form S-2 (SEC File No. 33-65338), is hereby incorporated herein by reference. 4.2 Bylaws of PALFED, Inc, as amended, incorporated by reference to Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. 5.1 Opinion of Howard M. Hickey, Jr. as to the legality of securities being registered.* 24.1 Consent of Howard M. Hickey, Jr.* 24.3 Consent of Coopers & Lybrand.* 25 Power of Attorney.* ________________________ * Previously filed on June 8, 1995 as an exhibit to the Registrant's Registration Statement on Form S-8 (SEC File No. 33-93276) and incorporated herein by reference. -2- 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 of 1933; (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; (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 Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, 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 of 1933, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement 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. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 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 Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of such 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, such 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 Act and will be governed by the final adjudication of such issue. -3- 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 on Form S-8 to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Aiken, State of South Carolina on May 16, 1996. PALFED, INC. By: /s/ John C. Troutman -------------------- John C. Troutman President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement has been signed by the following persons in the capacities indicated as of May 16, 1996. SIGNATURES TITLE /s/ Albert H. Peters, Jr.* Chairman of the Board ------------------------------ Albert H. Peters, Jr. /s/ John C. Troutman President, Chief Executive Officer ------------------------------ and Director John C. Troutman /s/ Darrell R. Rains Executive Vice President, ------------------------------ Treasurer and Chief Financial Officer Darrell R. Rains /s/ Michael B. Smith* Senior Vice President and Controller ------------------------------ Michael B. Smith /s/ William F. Cochrane* Director ------------------------------ William F. Cochrane /s/ Patrick D. Cunning* Director ------------------------------ Patrick D. Cunning [Signatures continued on next page] -4- SIGNATURES TITLE /s/ Edward Larry Hutto* Director ------------------------------ Edward Larry Hutto /s/ Harold D. Kingsmore* Director ------------------------------ Harold D. Kingsmore /s/ R. Bruce McBratney* Director ------------------------------ R. Bruce McBratney /s/ Ambrose L. Schwallie* Director ------------------------------ Ambrose L. Schwallie /s/ Charles E. Simons, III* Director ------------------------------ Charles E. Simons, III *By:/s/ Howard M. Hickey, Jr. ------------------------------ Howard M. Hickey, Jr. Attorney-in-Fact -5- Pursuant to the requirements of the Securities Act of 1933, the Administrator of the PALFED, Inc. Amended and Restated Directors Stock Plan has duly caused this Post-Effective Amendment No. 1 to the Registration Statement on form S-8 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Aiken, State of South Carolina, on May 16, 1996. PALFED, Inc., as Administrator of the PALFED, Inc. Amended and Restated Directors Stock Plan By:/s/ Darrell R. Rains --------------------------------- Darrell R. Rains Executive Vice President, Treasurer and Chief Financial Officer -6- INDEX TO EXHIBITS EXHIBIT SEQUENTIALLY NUMBER EXHIBIT NUMBERED PAGE 4.0 PALFED, Inc. Amended and Restated Directors Stock Plan, as amended as of April 23, 1996. 4.1 Restated Articles of Incorporation of PALFED, Inc., filed on July 1, 1993 as Exhibit 4.1 to the Registrant's Registration Statement on Form S-2 (SEC File No. 33-65338), is hereby incorporated herein by reference. 4.2 Bylaws of PALFED, Inc, as amended, incorporated by reference to Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. 5.1 Opinion of Howard M. Hickey, Jr. as to the legality of securities being registered.* 24.1 Consent of Howard M. Hickey, Jr.* 24.2 Consent of Coopers & Lybrand.* 25 Power of Attorney.* ________________________ * Previously filed on June 8, 1995 as an exhibit to the Registrant's Registration Statement on Form S-8 (SEC File No. 33-93276). -7- EX-4.0 2 EXHIBIT 4.0 EXHIBIT 4.0 PALFED, INC. AMENDED AND RESTATED DIRECTORS STOCK PLAN (As amended as of April 23, 1996) 1. PURPOSE OF THE PLAN. The purpose of the PALFED, Inc. Directors Stock Plan (the "Plan") is to advance the interests of PALFED, Inc. (the "Company") by encouraging and providing an opportunity for directors, consulting directors and advisory directors of the Company who are not employees of the Company or any of its subsidiaries to acquire shares of common stock, $1.00 par value, of the Company ("Common Stock"), and to provide an additional incentive for such directors to continue service to the Company. It is anticipated that the Plan will assist the Company in attracting and retaining directors capable of making valuable contributions to the long-term success of the Company. The Plan provides for the grant of stock options ("Options") and shares of Company Common Stock, subject to certain restrictions. Common Stock granted pursuant to this Plan is hereinafter referred to as "Restricted Stock." Grants of Options and Restricted Stock under this Plan are referred to as an "Award" or collectively as "Awards." 2. SHARES RESERVED FOR THE PLAN. Subject to adjustment as provided in section 10 of this Plan, the maximum number of shares of Common Stock that may be issued under Awards granted under the Plan shall be a total of 250,000 shares of Common Stock. If (a) an Award expires, is cancelled, terminates for any reason, without being exercised in full or is satisfied without the issuance of Common Stock, or (b) Common Stock distributed pursuant to an Award is forfeited or reacquired by the Company, or is surrendered upon the exercise of an Award, the shares of Common Stock subject to such an Award or so forfeited, reacquired or surrendered shall again be available for future Awards under the Plan. 3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by a committee of the Board of Directors consisting of not less than three (3) directors who are "disinterested persons" within the meaning of Rule 16b-3 promulgated by the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As used herein, the term "Committee" refers to such committee. Subject to the provisions of the Plan, the Committee shall have full and conclusive authority to interpret and construe the terms and intent of the Plan; to determine the terms and provisions of Awards to consulting directors and advisory directors, to prescribe, amend and rescind rules and regulations relating to the Plan, to determine the terms and provisions of Restricted Stock or Option agreements, and to make all other determinations necessary or advisable for the proper administration of the Plan; provided that the Committee shall have no discretion with respect to the selection of directors to receive Awards under the Plan, the number of shares of Common Stock subject to such Awards, or the timing of the issuance of Awards under the Plan, but may exercise such discretion with respect to consulting and advisory directors. No member of the Committee shall be liable for any determination, decision or action made in good faith with respect to the Plan or any Awards under the Plan. The Committee may delegate any of such responsibilities to one or more agents and may retain advisors to advise it. 4. ELIGIBILITY. Each director of the Company who is not employed by the Company or any of its subsidiaries within the one (1) year immediately preceding the Company's Annual Meeting of Shareholders (individually an "Eligible Director" and collectively, the "Eligible Directors") shall be eligible to receive Awards under this Plan. No employee of the Company or any of its subsidiaries shall be eligible to receive Awards under this Plan. Consulting and advisory directors of the Company who are not employees of the Company or any of its subsidiaries shall constitute "Eligible Directors" and shall be eligible for Awards under this Plan. Notwithstanding any provision of the Plan to the contrary, the selection of consulting and advisory directors to receive Awards, the timing and amount of such Awards, and the performance criteria for Awards to consulting and advisory shall be solely at the discretion of the Committee; provided that Awards to consulting and advisory directions shall be subject to the limitations set forth in this Plan. 5. RESTRICTED STOCK GRANTS. Upon election by the shareholders of the Company as a director of the Company, each Eligible Director who has not previously received an Award of Restricted Stock under this Plan shall automatically receive on the first business day following such election by the shareholders an Award for 1,000 shares of Restricted Stock. Directors who have received an Award of Restricted Stock under this Plan shall not receive future awards of Restricted Stock under this Plan, and no Eligible Director shall receive an Award of Restricted Stock pursuant to this Section 5 upon becoming an advisory, consulting or honorary director. If the aggregate number of shares of Common Stock subject to Awards exceeds the remaining number of shares reserved for issuance under the Plan in that year, the number of shares of Restricted Stock awarded to each Eligible Director to whom Awards are granted on such date shall be reduced pro rata so that the aggregate number of shares awarded equals the number of reserved shares of Common Stock remaining under the Plan for that year. 6. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS. Subject to the following terms and conditions, Awards of Restricted Stock shall be evidenced by Restricted Stock Agreements ("Agreements") executed by the Company and the Eligible Director receiving the Award in such form and not inconsistent with the Plan as the Committee shall approve from time to time. (a) RESTRICTED PERIOD. Shares of Restricted Stock awarded pursuant to an Award shall be subject to restrictions for one (1) year from the date of the Award. In the event that an Eligible Director resigns or is removed as a director for any reason during such one (1) year restriction period, the Restricted Stock shall be forfeited. (b) RESTRICTIONS ON TRANSFER. Shares of Restricted Stock awarded, and the right to vote such shares and to receive dividends thereon, may not be sold, assigned, transferred, pledged or otherwise encumbered, during the restriction period applicable to such shares. Notwithstanding the foregoing, and except as otherwise provided in this Plan or an Agreement, the holder of Restricted Stock shall have all other rights of a shareholder. (c) CERTIFICATES. Each certificate issued in respect of shares of Restricted Stock awarded to an Eligible Director shall be registered in the name of such director and deposited with the Company, or its designee, and shall bear the following legend: "This certificate and the shares of common stock represented hereby are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in the PALFED, Inc. Directors Stock Plan and an Agreement entered into between PALFED, Inc. and the registered owner. Release from such terms and conditions shall be obtained only in accordance with the provisions of the Plan and Agreement, copies of which are on file in the office of the Secretary of PALFED, Inc., Aiken, South Carolina." (d) APPLICABILITY OF RESTRICTIONS TO ADDITIONAL SECURITIES. Any shares of Restricted Stock or other securities of the Company or any other entity which are issued as a distribution on, or in exchange for, Restricted Stock or into which Restricted Stock is converted as a result of a recapitalization, stock dividend, distribution of securities, stock split or combination of shares or a merger, consolidation or sale of substantially all of the assets of the Company shall be subject to the restrictions set forth in the Agreement, which shall inure to the benefit of any surviving or successor corporation that is the issuer of such securities. The certificates representing any such shares or other securities shall bear a legend substantially in the form prescribed in section 6(c) with such changes as may be appropriate in the context. 7. STOCK OPTIONS GRANTS. On the first business day following each Annual Meeting of Shareholders, each Eligible Director shall automatically be granted Options to acquire the number of shares of Common Stock determined in accordance with the following schedule: (i) Options to acquire 3,000 shares of Common Stock if the Company's Net Income (as defined below) exceeds $4 million; (ii) Options to acquire 2,000 shares of Common Stock if the Company's Net Income exceeds $3 million; and (iii) Options to acquire 1,000 shares of Common Stock if the Company's Net Income exceeds $2 million. No Options may be granted if the Company did not have Net Income for its latest fiscal year of at least $2 million. For purposes of this section, "Net Income" shall mean the Company's net income after taxes for its latest fiscal year determined in accordance with generally accepted accounting principles, but exclusive of accounting adjustments, loan loss provisions and extraordinary items. If the aggregate number of shares of Common Stock subject to Awards exceeds the remaining number of shares reserved for issuance under the Plan in that year, the number of Options awarded to each Eligible Director to whom Options are granted on such date shall be reduced pro rata so that the aggregate number of Options awarded equals the number of reserved shares of Common Stock remaining under the Plan for that year. 8. TERMS AND CONDITIONS OF OPTIONS. Subject to the following terms and conditions, all Options granted under this Plan shall be evidenced by a written Option agreement in such form and upon such terms and conditions, not inconsistent with this Plan, as the Committee shall from time to time determine. (a) OPTION TERM AND DATE. No Option shall be exercisable after the expiration of three (3) years from the date the Option is granted or more than twelve (12) months after the holder ceases to be an Eligible Director. The date an Option is granted shall be as of the first business day following the Company's Annual Meeting of Shareholders. (b) OPTION PRICE. The option price per share of Common Stock purchasable under an Option granted under this Plan shall be the fair market value of a share of Common Stock as of the date of the grant. (c) PAYMENT. Payment for all shares purchased pursuant to exercise of an Option shall be made in cash, or by delivery of Common Stock at its fair market value on the date of delivery. Such payment shall be made at the time that the Option or any part thereof is exercised, and no shares shall be issued or delivered until full payment therefor has been made. Prior to the exercise of an Option, the holder of an Option shall have none of the rights of a shareholder. (d) CONDITIONS TO EXERCISE OF AN OPTION; FORFEITURE. Subject to the provisions of section 9 below, each Option granted under the Plan shall be exercisable no earlier than one (1) year from the date of the grant, except that no Option may be exercised to any extent for at least six (6) months from the date of the grant. (e) NONTRANSFERABILITY OF OPTION. An Option shall not be assignable or transferable except by will or by the laws of descent and distribution, and shall be exercisable, during the holder's lifetime, only by the holder. Any distributee by will or by the laws of descent and distribution shall be bound by the provisions of this Plan. Any attempt to assign, pledge, transfer, hypothecate or otherwise dispose of an Option, and any levy of execution, attachment or similar process on an Option shall be null and void. (f) TERMINATION OF OPTIONS. In the event that a holder of an Option shall cease to be an Eligible Director of the Company for any reason other than for "cause", such Option shall be exercisable only to the extent it was exercisable at the date such director ceased to be an Eligible Director and only for a period of twelve (12) months after such date. No Option shall be exercised in the event the holder is removed as a director for "cause" (as defined in the Option agreement between the holder and the Company). 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 death) by a legatee or legatees of the holder under his last will, or by his personal representatives or distributees, at any time within the twelve (12) month period following the holder's death. For purposes of this paragraph (f), an Eligible Director shall not be deemed terminated for purposes of this Plan (i) so long as the director remains an advisory or consulting director of the Company or another corporation (or a parent or subsidiary corporation of such other corporation) which has assumed the Option of the holder, or (ii) such director is employed by or serves as a consultant to the Company or any of its subsidiaries. 9. ACCELERATION OF RIGHT OF EXERCISE; LAPSE OF RESTRICTIONS. Notwithstanding the vesting provisions of sections 6(a) or 8(d) of this Plan, (but subject to the provisions of section 8(f) 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 and all restrictions on any Restricted Stock granted under this Plan shall lapse if: (a) a tender offer or exchange offer has been made for at least twenty-five percent (25%) of the outstanding shares of Common Stock, other than one made by the Company, provided that the corporation, person or other entity making such offer purchases or otherwise acquires shares of Common Stock pursuant to such offer; or (b) the shareholders 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 corporation or to sell or otherwise dispose of all or substantially all of its assets; or (c) any person, entity or group, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding for purposes of this section any employee benefit plan of the Company which acquires beneficial ownership of voting securities of the Company) becomes the holder of twenty-five percent (25%) or more of the outstanding shares of Stock. If any of the events specified in this section 9 have occurred, the Option shall be fully exercisable: (i) in the event of (a) above, within a 30-day period commencing on the date of expiration of the tender offer or exchange offer; or (ii) in the event of (b) above, within a 30-day period commencing on the date of approval by the shareholders of the Agreement; or (iii) in the event of (c) 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 Exchange Act and rules and regulations promulgated thereunder) indicating that any person or group has become the holder of twenty- five percent (25%) or more of the outstanding shares of Common Stock or, if the Company is not subject to Section 13(d) of the Exchange 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 twenty-five percent (25%) or more of the outstanding shares of Common Stock. 10. CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION. The number of shares of Common Stock as to which Awards may be granted, the number of shares covered by each outstanding Award, and the price per share of each outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of outstanding shares of Common Stock resulting from a subdivision or combination of shares, the payment of a stock dividend, or other combination or reclassification of the Common Stock effected without receipt of consideration by the Company. If the Company shall be the surviving entity in any merger or consolidation, recapitalization, reclassification of shares or similar reorganization, the holder of each outstanding Option shall be entitled to purchase upon any exercise of an Option, 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 Common Stock or other securities to which a holder of the same number of shares of Common Stock at the time of such transaction would have been entitled to receive as a result of such transaction. Any such adjustment may provide for the elimination of any fractional shares which might otherwise become subject to any Option without payment therefor. Comparable rights shall accrue to each holder in the event of successive mergers or consolidations. In the event of such changes in capitalization of the Company, the Committee or the Board of Directors may make such additional adjustments in the number and class of shares of Common Stock or other securities with respect to which outstanding Awards are exercisable and with respect to which future Awards may be granted as the Committee in its sole discretion shall deem equitable or appropriate, subject to the provisions of section 14. In the event of 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, provision shall be made for each outstanding Option to become exercisable prior to such dissolution, liquidation, merger or consolidation, except to the extent that another corporation or other legal entity assumes such Option or substitutes another option therefor. In the event of a change of the Company's shares of Common 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 Common Stock within the meaning of the Plan. Except as expressly provided in this section 10, the holder of an Award shall have no rights by reason of any subdivision or combination of shares of Common Stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of Common Stock of any class or by reason of any dissolution, liquidation, merger, consolidation or distribution to the Company's shareholders of assets or stock of another corporation, and any issuance by the Company of shares of Common Stock of any class, or securities convertible into shares of Common 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 Common Stock subject to an Award. The existence of the Plan and the Awards 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 equity securities having preferences or priorities as to the Common 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. 11. RESTRICTION ON ISSUANCE OF SHARES. The Company shall not be obligated to sell or issue any shares of Common Stock pursuant to any Option if such issuance would result in the violation of any laws, including the Securities Act of 1933, as amended (the "1933 Act") or any rules and regulations promulgated by the Office of Thrift Supervision ("OTS") or Federal Deposit Insurance Corporation ("FDIC") or any successor agency of the OTS or FDIC. In the event that the offering of shares with respect to which an Award is issued is not registered under the 1933 Act, but an exemption is available which requires an investment representation or other representation, each Eligible Director receiving shares under this Plan shall be required to represent that such shares are being acquired for investment and not with a view to the sale or distribution thereof, and to make such other representations as are deemed necessary by counsel to the Company. 12. TERMINATION AND AMENDMENT OF THE PLAN. The Board of Directors or the Committee may terminate the Plan, in whole or in part, may suspend the Plan, in whole or in part from time to time, and may amend the Plan from time to time, including the adoption of amendments deemed necessary or desirable under laws and regulations promulgated by the SEC with respect to the provisions of Section 16 of the Exchange Act, or to correct any defect or supply an omission or reconcile any inconsistency in the Plan or in any Option granted thereunder, without the approval of the shareholders of the Company. Any modification or amendment that would (i) materially increase the aggregate number of shares of Common Stock that may be issued under the Plan (other than an increase reflecting a change in capitalization such as a stock dividend or stock split), (ii) materially modify the designation of individuals eligible to receive Awards under the Plan, or (iii) materially increase the benefits accruing to holders of any Award granted or to be granted under the Plan, within the meaning of SEC Rule 16b-3, 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; provided that no shareholder approval shall be required if such approval is not required for the continued qualification of the Plan under Rule 16b-3 of the Exchange Act. Notwithstanding the foregoing, this Plan shall not be amended more often than once every six (6) months, other than to comply with changes in the Internal Revenue Code, the Employee Retirement Income Security Act, or the rules thereunder. 13. MISCELLANEOUS. (a) CONSTRUCTION. This Plan and all Awards granted or transactions under this Plan are intended to comply with all applicable provisions of SEC Rule 16b-3 or any successor provision under the Exchange Act, and all provisions of this Plan shall be construed in such manner as to effect that intent. To the extent any provision of the Plan or any 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. In administering this Plan, the Committee may adopt such requirements as it deems appropriate to comply with SEC Rule 16b- 3 or any successor provision, and the Board of Directors or the Committee may amend this Plan to the extent necessary to comply with such provisions, subject to section 12 of this Plan. (b) NO RIGHT TO SERVICE AS A DIRECTOR. Nothing contained in the Plan or in any Award granted under the Plan shall confer upon any Eligible Director any right with respect to the continuation of service as a director, consulting director or advisory director of the Company or any of its subsidiaries, or interfere in any way with the right of the Company or its shareholders, subject to the Company's Articles of Incorporation, Bylaws and applicable law, to terminate such director's services as a director, consulting director or advisory director of the Company. (c) WITHHOLDING. Whenever the Company proposes or is required to issue or transfer shares of Common Stock under this Plan, the Company shall have the right to withhold from amounts or shares due the recipient or to require the recipient to remit to the Company an amount sufficient to satisfy any federal, state or local withholding tax requirements prior to the delivery of any certificate or certificates or the payment of any dividends with respect to such shares. (d) NO FRACTIONAL SHARES. No fractional shares of Common Stock shall be issued under the Plan, and cash shall be paid in lieu of any fractional shares in settlement of Options granted under the Plan. 14. GOVERNING LAW. The provisions of the Plan shall be governed by and interpreted in accordance with the laws of the State of South Carolina.