-----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, DQWyrCHf0LiyBepZdQLTYFo8Ait62NACPuZp57ShcctwmcXJKvre53KDR8QIQedE YnePTuF9yEgkR3gNfF3fCg== 0001019892-03-000112.txt : 20030820 0001019892-03-000112.hdr.sgml : 20030820 20030820171025 ACCESSION NUMBER: 0001019892-03-000112 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20030820 EFFECTIVENESS DATE: 20030820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PALMETTO BANCSHARES INC CENTRAL INDEX KEY: 0000706874 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 742235055 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-108108 FILM NUMBER: 03858587 BUSINESS ADDRESS: STREET 1: 301 HILLCREST DR STREET 2: P O BOX 49 CITY: LAURENS STATE: SC ZIP: 29360 BUSINESS PHONE: 8649844551 S-8 1 forms8-08202003.txt FOR AMENDED STOCK OPTION PLAN AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 20, 2003 REGISTRATION FILE NO. __________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PALMETTO BANCSHARES, INC. (Exact name of registrant as specified in its charter) South Carolina 74-2235055 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 301 HILLCREST DRIVE LAURENS, SOUTH CAROLINA 29360 (864) 984-4551 (TELEPHONE) ------------------------------ (Address, including Zip code, and telephone number, including area code, of registrant's principal executive offices) AMENDED AND RESTATED PALMETTO BANCSHARES, INC. 1997 STOCK COMPENSATION PLAN --------------------------------------------------------------------------- (Full title of plans) L. LEON PATTERSON PALMETTO BANCSHARES, INC. 301 HILLCREST DRIVE POST OFFICE BOX 49 LAURENS, SOUTH CAROLINA 29360 (864) 984-4551 ------------------------------ (Name, address, and telephone number, including area code, of agent for service) Copies to: ANDREW B. COBURN, ESQ. WYCHE, BURGESS, FREEMAN & PARHAM, P.A. POST OFFICE BOX 728 GREENVILLE, SOUTH CAROLINA 29602-0728 (864) 242-8200 (TELEPHONE) (864) 235-8900 (FACSIMILE)
CALCULATION OF REGISTRATION FEE - -------------------------------------------------------------------------------------------------------------------------------- Proposed Maximum Proposed Maximum Title of Each Class Amount to Offering Price Aggregate Amount of of Securities to be Registered be Registered Per Security Offering Price (1) Registration Fee - -------------------------------------------------------------------------------------------------------------------------------- Common Stock........ 100,000 shares $ (1) $1,199,416.00 $97.03 - --------------------------------------------------------------------------------------------------------------------------------
(1) Pursuant to Rule 457(h), the exercise price of $20.00 is used for the purpose of calculating the registration fee as to 8,400 shares for which options have been granted and book value of $11.26 is used for purposes of calculating the registration fee as to 91,600 shares for which options have not yet been granted. The Exhibit Index appears on Page 5 hereof. PART I: INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS ITEM 1. PLAN INFORMATION. Not included in this Registration Statement but provided or to be provided to the participants in the following plan (the "Plan") of Palmetto Bancshares, Inc. (the "Company") pursuant to Rule 428(b) of the Securities Act of 1933, as amended (the "Securities Act"). Amended and Restated Palmetto Bancshares, Inc. 1997 Stock Compensation Plan ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION. Not included in this Registration Statement but provided or to be provided to the Plan's participants pursuant to Rule 428(b) of the Securities Act. PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents or portions thereof are hereby incorporated by reference: The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 filed on March 18, 2003, Commission File No. 0-26016. The Company's Quarterly Report on Form 10-Q for the period ended March 31, 2003 filed on May 15, 2003, Commission File No. 0-26016. The Company's Quarterly Report on Form 10-Q for the period ended June 30, 2003 filed on August 14, 2003, Commission File No. 0-26016. All other reports filed by the Company pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, since the end of the Company's 2002 fiscal year. The description of the Company's common stock contained in or incorporated into the Company's registration statement on Form 8-A filed with the Securities and Exchange Commission on or about April 30, 1995, including any amendments thereto or reports filed for the purpose of updating such description, Commission File No. 0-26016. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be part thereof, from the date of filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. The law firm of Wyche, Burgess, Freeman & Parham, P.A., located in Greenville, South Carolina, is counsel to the registrant in connection with this Registration Statement. James M. Shoemaker, Jr., Esq., a member of Wyche, Burgess, Freeman & Parham, P.A., is a Director of Palmetto Bancshares, Inc. and owns at the filing of this Registration Statement 19,200 shares of common stock of the registrant. 2 ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Sections 33-8-500 through 33-8-580 of the 1976 Code of Laws of South Carolina, as amended, (the "Code") relating to permissible, mandatory and court-ordered indemnification of directors and officers of South Carolina corporations in certain circumstances are set forth in Exhibit 99.2 of this Registration Statement and are incorporated herein by reference. Article V of the Company's Bylaws provides as follows: "SS.5.1 Indemnification of Directors. Unless otherwise provided in the articles, the corporation shall indemnify any individual made a party to a proceeding because he is or was a director of the company, against liability incurred in the proceeding, but only if such indemnification is both (i) permissible and (ii) authorized, as defined in subsection (a) of this ss. 5.1. (Such indemnification is further subject to the limitation specified in subsection (c).) (a) Determination and Authorization The corporation shall not indemnify a director under this ss. 5.1 of Article V unless: (1) Determination: A determination has been made in accordance with the procedures set forth in ss. 33-8- 550(b) of the Act that the director met the standard of conduct set forth in subsection (b) below, and (2) Authorization: The board of directors (as specified in ss. 33-8-550(c) of the Act) authorizes payment after they have concluded that the expenses are reasonable, the corporation has the financial ability to make the payment, and that the financial resources of the Company should be devoted to this use rather than some other use by the corporation. (b) Standard of Conduct The individual shall demonstrate that: (1) he conducted himself in good faith; and (2) he reasonably believed: (i) in the case of conduct in his official capacity with the corporation, that his conduct was in its best interests; and (ii) in all other cases, that his conduct was at least not opposed to its best interests; and (iii) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. The corporation shall not indemnify a director under this ss. 5.1 of Article V: (1) in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or 3 (2) in connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. (c) Indemnification in Derivative Actions Limited Indemnification permitted under this ss. 5.1 of Article V in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding. SS.5.2 Advance Expenses for Directors If a determination is made, following the procedures of Article V ss. 5.1(a), that the director has met the following requirements; and if an authorization of payment is made, also following the procedures and standards set forth in Article V ss. 5.1(a); then unless otherwise provided in the articles of incorporation, the Company shall pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding, if: (a) the director furnishes the corporation a written affirmation of his good faith belief that he has met the standard of conduct described in subsection (b) of ss. 5.1 of this Article V. (b) the director furnishes the corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct (which undertaking must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment); and (c) a determination is made that the facts then known to those making the determination would not preclude indemnification under section 5.1 of this Article V or ss. 33-8-500 through ss. 33-8-580 of the Act. SS.5.3 Indemnification of Officers, Agents, and Employees Who Are Not Directors. Unless otherwise provided in the articles of incorporation the board of directors may indemnify and advance expenses to any officer, employee, or agent of the corporation, who is not a director of the corporation, to any extent, consistent with public policy, as determined by the general or specific action of the board of directors." The Company's Articles of Incorporation provide that a director of the Company shall not be personally liable to the Company or any of its shareholders for monetary damages for breach of fiduciary duty as a director, provided that a director's liability shall not be eliminated or limited with respect to (i) any breach of the director's duty of loyalty to the Company or its stockholders; (ii) acts or omissions not in good faith or which involve gross negligence, intentional misconduct, or a knowing violation of laws; (iii) liability imposed under Section 33-8-330 of the South Carolina Business Corporation Act of 1988 (relating to improper distributions to shareholders); or (iv) liability for any transaction from which the director derived an improper personal benefit. Furthermore, Section 14 of the Plan, entitled "Indemnification of Board or Committee," provides that, in addition to rights of indemnification they may have as members of the Board, the members of the Board or Committee shall, to the fullest extent permitted by law, be indemnified by the Company against the reasonable expenses, including attorney's fees, actually and necessarily incurred in connection with the defense of any action, suit or 4 proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Option granted thereunder, and against all amounts paid by them in settlement thereof (provided the settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Board member or Committee member is liable for gross negligence or misconduct in the performance of his duties; provided that within 60 days after institution of any such action, suit or proceeding the Board member or Committee member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. Policies of insurance are maintained by the Company under which its directors and officers are insured, within the limits and subject to the limitations of the policies, against certain expenses in connection with the defense of actions, suits or proceedings, and certain liabilities which might be imposed as a result of such actions, suits or proceedings, to which they are parties by reason of being or having been such officers or directors. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. 4.1 Articles of Incorporation: Incorporated by reference to Exhibit 3 to the Company's Registration Statement on Form S-4, File No. 33-19367 (the "Form S-4"). 4.2 Articles of Amendment: Incorporated by reference to Exhibit 4.1.2 to the Company's Registration Statement on Form S-8, Commission File Number 33-51212, filed on August 20, 1992. 4.3 Articles of Amendment: Incorporated by reference to Exhibit 4.1.3 to the Company's Registration Statement on Form S-8, Commission File Number 33-51212, filed on August 20, 1992. 4.4 Articles of Amendment: Incorporated by reference to Exhibit 4.1.4 to the Company's Registration Statement on Form S-8, Commission File Number 33-51212, filed on August 20, 1992. 4.5 Articles of Amendment: Incorporated by reference to Exhibit 3.1.5 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1996. 4.6 Bylaws of the Company: Incorporated by reference to Exhibit 3.2.1 to the Company's Annual Report on Form 10-K filed on March 31, 1997. 4.7 Amendment to Bylaws of the Company: Incorporated by reference to Exhibit 3.2.2 to the Company's Annual Report on Form 10-K filed on March 31, 1997. 4.7 Specimen certificate for common stock of the Company: Incorporated by reference to Exhibit 4.3 of the Company's Registration Statement on Form S-8, Commission File Number 33-55212, filed on August 20, 1992. 5.1 Opinion of Wyche, Burgess, Freeman & Parham, P.A. regarding legality of shares of Palmetto Bancshares, Inc. 23.1 Consent of Elliott Davis, LLC. 5 23.2 Consent of KPMG LLP 23.3 Consent of Wyche, Burgess, Freeman & Parham, P.A.: contained in Exhibit 5.1. 24.1 Power of Attorney: Contained on the signature page of this Registration Statement. 99.1 Amended and Restated Palmetto Bancshares, Inc. 1997 Stock Compensation Plan. 99.2 Sections 33-8-500 through -580 of the 1976 Code of Laws of South Carolina, as amended. 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. 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; and (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, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 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. 6 (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 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. (h) 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 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 Act and will be governed by the final adjudication of such issue. [Page ends; signature page follows] 7 SIGNATURES Pursuant to the requirements of the Securities Act, Palmetto Bancshares, Inc. 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 Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Laurens, State of South Carolina, on August 20, 2003. PALMETTO BANCSHARES, INC. By: /s/ L. Leon Patterson ----------------------------------------- L. Leon Patterson Chairman & Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints L. Leon Patterson and Paul W. Stringer and each of them, as true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all annexes thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all which said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do, or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and as of the dates indicated:
SIGNATURE TITLE DATE /s/ L. Leon Patterson - ---------------------- Chairman and Chief Executive Officer August 20, 2003 L. Leon Patterson (Principal Executive Officer) /s/ Paul W. Stringer - -------------------- President and Chief Operating Officer August 20, 2003 Paul W. Stringer (Principal Accounting and Financial Officer and Director) /s/ J. David Wasson, Jr. - -------------------- Director August 20, 2003 J. David Wasson, Jr. /s/ Sam B. Phillips, Jr. - -------------------- Director August 20, 2003 Sam B. Phillips, Jr. - -------------------- Director ___________, 2003 William S. Moore - -------------------- Director ___________, 2003 John T. Gramling, II /s/ James M. Shoemaker - -------------------- Director August 20, 2003 James M. Shoemaker 8 /s/ Edward K. Snead, III - -------------------- Director August 20, 2003 Edward K. Snead, III /s/ W. Fred Davis, Jr. - -------------------- Director August 20, 2003 W. Fred Davis, Jr. - -------------------- Director ___________, 2003 David P. George, Jr. /s/ Michael D. Glenn - -------------------- Director August 20, 2003 Michael D. Glenn /s/ Ann B. Smith - -------------------- Director August 20, 2003 Ann B. Smith
9 INDEX TO EXHBITS CONTAINED HEREIN Exhibit 5.1 Opinion of Wyche, Burgess, Freeman & Parham, P.A. regarding legality of shares of Palmetto Bancshares, Inc. 23.1 Consent of Elliott Davis, LLC. 23.2 Consent of KPMG LLP 23.3 Consent of Wyche, Burgess, Freeman & Parham, P.A.: contained in Exhibit 5.1. 24.1 Power of Attorney: Contained on the signature page of this Registration Statement. 99.1 Amended and Restated Palmetto Bancshares, Inc. 1997 Stock Compensation Plan. 99.2 Sections 33-8-500 through -580 of the 1976 Code of Laws of South Carolina, as amended. 10 EX-5 3 legalopinion.txt OPINION OF WYCHE, BURGESS, FREEMAN & PARHAM, PA EXHIBIT 5.1 August 18, 2003 Palmetto Bancshares, Inc. 301 Hillcrest Drive Laurens, SC 29360 RE: Registration Statement on Form S-8 of Common Stock Subject to Palmetto Bancshares, Inc. Amended and Restated 1997 Stock Compensation Plan Ladies and Gentlemen: The opinion set forth below is rendered with respect to the 100,000 shares, $5.00 par value per share, of common stock of Palmetto Bancshares, Inc., a South Carolina corporation (the "Company"), that will be registered with the Securities and Exchange Commission by the above-referenced Registration Statement on Form S-8 pursuant to the Securities Act of 1933, as amended, in connection with the Palmetto Bancshares, Inc. Amended and Restated 1997 Stock Compensation Plan (the "Plan"). We have examined the Company's Articles of Incorporation, and all amendments thereto, the Company's Bylaws, as amended, and reviewed the records of the Company's corporate proceedings. We have made such other investigation of law and fact as we have deemed necessary in order to enable us to render this opinion. With respect to matters of fact, we have relied upon information provided to us by the Company without further investigation. With respect to all examined documents, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to authentic originals of all documents submitted to us as copies and the accuracy and completeness of the information contained therein. We also assume that any action by the Board of Directors of the Company, or any committee thereof, approving the terms of any stock award will be taken in compliance with the Articles of Incorporation and Bylaws of the Company and applicable provisions of the South Carolina Code, as amended, and that any committee of the Board of Directors of the Company that may approve the terms of any stock award will have been duly established and authorized in accordance with the Articles of Incorporation and Bylaws and applicable provisions of the South Carolina Code, as amended. Based on the foregoing and subject to the limitations and qualifications set forth below, we are of the opinion that upon satisfaction of the vesting and other conditions set forth in the Plan and in any applicable stock award agreement or letter, shares of the Company's common stock covered by the above-referenced Registration Statement that are issued after the date hereof under and in compliance with the terms of the Plan will be legally issued, fully paid and non-assessable. This opinion is limited to matters governed by the laws of the State of South Carolina in force on the date of this letter. We express no opinion with regard to any matter that may be (or which purports to be) governed by the laws of any other state or jurisdiction. In addition, we express no opinion with respect to any matter arising under or governed by the South Carolina Uniform Securities Act. This opinion is rendered as of the date of this letter and applies only to the matters specifically covered by this opinion, and we disclaim any continuing responsibility for matters occurring after the date of this letter. This opinion is rendered solely for your benefit in connection with the Registration Statement on Form S-8 respecting shares of the Company's common stock to be issued under the Plans and may not be relied upon, quoted or used by any other person or entity or for any other purpose without our prior written consent. We consent to the use of this opinion as an exhibit to the Registration Statement on Form S-8 respecting shares of the Company's common stock to be issued under the Plan. Very Truly Yours, /s/ Wyche, Burgess, Freeman & Parham, P.A. WYCHE, BURGESS, FREEMAN & PARHAM, P.A. EX-23 4 auditorconsent-1.txt AUDITOR CONSENT EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Palmetto Banchshares, Inc. on Form S-8 of our report dated February 7, 2003, included in the Annual Report on Form 10-K of Palmetto Banchares, Inc. for the year ended December 31, 2002. /s/ Elliott Davis, LLC Greenville, South Carolina August 20, 2003 EX-23 5 auditorconsent-2.txt AUDITOR CONSENT EXHIBIT 23.2 The Board of Directors Palmetto Bancshares, Inc. We consent to the use of our report dated February 9, 2001, with respect to the consolidated statements of income, changes in shareholders' equity and comprehensive income, and cash flows of Palmetto Bancshares, Inc. and subsidiary for the year ended December 31, 2000. /s/ KPMG LLP KPMG LLP Greenville, SC August 20, 2003 EX-99 6 plan.txt STOCK OPTION PLAN EXHIBIT 99.1 PALMETTO BANCSHARES, INC. AMENDED AND RESTATED 1997 STOCK COMPENSATION PLAN 1. PURPOSE The Stock Compensation Plan (the "Plan") of Palmetto Bancshares, Inc. (the "Company") is intended to allow certain key employees and directors of the Company and its subsidiaries to have an opportunity to acquire an ownership interest in the Company as an additional incentive to attract and retain employees and directors and to encourage them to promote the Company's business. This purpose will be achieved through the grant of stock options ("Options") to purchase shares of common stock of the Company ("Common Stock"). 2. ADMINISTRATION The Plan shall be administered by the Company's Board of Directors (the "Board") or by a committee of the Board (the "Committee") composed solely of all members thereof who are "disinterested persons" (as so defined)). The Board or Committee shall have complete authority to: (i) interpret all terms and provisions of the Plan consistent with law; (ii) select from the group of officers and key employees eligible to participate in the Plan the officers and key employees to whom Options shall be granted; (iii) within the limits established herein, determine the number of shares to be subject to, the exercise price of and the term of each Option granted to each director, officer and key employee; (iv) prescribe the form of instrument(s) evidencing Options granted under this Plan; (v) determine the time or times at which Options shall be granted to directors, officers or key employees; (vi) make special grants of Options to directors, officers or key employees when determined to be appropriate; (vii) provide, if appropriate, for the exercisability of Options granted to directors, officers or key employees in installments or subject to specified conditions; (viii) determine the method of exercise of Options granted under the Plan; (ix) adopt, amend and rescind general and special rules and regulations for the Plan's administration; and (x) make all other determinations necessary or advisable for the administration of this Plan. The Board or Committee may designate selected Board or Committee members or certain employees of the Company to assist the Board or Committee in the administration of the Plan and may grant authority to such persons to execute documents, including Options, on behalf of the Board or Committee. No member of the Board or Committee or employee of the Company assisting the Board or Committee pursuant to the preceding paragraph shall be liable for any action taken or determination made in good faith. 3. STOCK SUBJECT TO PLAN The stock to be offered under this Plan shall be authorized but unissued shares of Common Stock, shares of Common Stock previously issued and thereafter acquired by the Company, or any combination thereof. An aggregate of 450,000 shares are reserved for the grant under this Plan of Options. Any or all of the options granted under Section 4 hereof to officers and key employees may, at the Board's or Committee's discretion, be intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). The numbers of shares which may be granted under this Plan and under Section 4 hereof, respectively, may be adjusted to reflect any change in the capitalization of the Company as contemplated by Section 9 of the Plan and occurring after the adoption of this Plan. The Board or Committee will maintain records showing the cumulative total of all shares subject to Options outstanding under this Plan. 4. ELIGIBILITY AND FACTORS TO BE CONSIDERED IN GRANTING OPTIONS The grant of Options under this Plan shall be limited to directors and to those officers and key employees of the Company or any of its Subsidiaries who have the greatest impact on the Company's long-term performance and are selected by the Board or Committee. Members of the Company's Board of Directors who are also officers or employees of the Company are eligible to receive Options under this Plan. In making any determination as to the officer(s) and key employee(s) to whom Options shall be granted under this Plan and as to the number of shares to be subject thereto, the Board or Committee shall take into account, in each case, the level and responsibility of the person's position, the level of the person's performance, the person's level of compensation, the assessed potential of the person and such additional factors as the Board or Committee shall deem relevant to the accomplishment of the purposes of the Plan. Options may be granted under this Section 4 only for a reason connected with an officer's or key employee's employment by the Company or any Subsidiary. Notwithstanding any other provision of the Plan, the aggregate number of shares of Common Stock that may be acquired by any individual director who is not an employee of the Company shall not exceed 5,000 shares, subject to adjustment as provided in Section 9. a. Allotment of Shares The Board or Committee may, in its sole discretion and subject to the provisions of this Plan, grant to participants eligible under this Plan, on or after the date hereof, Options to purchase shares of Common Stock. Options granted under this Plan may, at the discretion of the Board or Committee, be: (i) Options which are intended to qualify as incentive stock options under Section 422 of the Code; (ii) Options which are not intended so to qualify under Section 422 of the Code; or (iii) both of the foregoing, if granted separately, and not in tandem. Each Option granted under this Plan must be clearly identified as to its status as an incentive stock option or not. Non-employee directors shall be granted only options not intended to qualify under Section 422 of the Code. Options granted under this Plan may be allotted to participants in such amounts, subject to the limitations specified in this Plan, as the Board or Committee, in its sole discretion, may from time to time determine. In the case of Options intended to be incentive stock options, the aggregate fair market value (determined at the time of the Options' respective grants) of the shares with respect to which incentive stock options are exercisable for the first time by a participant hereunder during any calendar year (under all plans taken into account pursuant to Section 422(d) of the Code) shall not exceed $100,000. Options under this Plan not intended to qualify as incentive stock options under Section 422 of the Code may be granted to any Plan participant without regard to the Section 422(d) limitations. b. Option Price The price per share at which each Option granted under this Plan may be exercised shall be such price as shall be determined by the Board or Committee at the time of grant based on such criteria as may be adopted by the Board or Committee at the time of grant in good faith, taking into account, in each case, the market price of the Common Stock, the level and responsibility of the person's position, the level of the person's performance, the person's level of compensation, the assessed potential of the person, and such additional factor or factors as the Board or Committee shall deem relevant to the accomplishment of the purposes of the Plan; provided, however, that in no event shall the exercise price per share of an Option be less than 100% of the fair market value of the Company's shares of Common Stock on the date the Option is granted. In the case of an Option intended to qualify as an incentive stock option under Section 422 of the Code, the price per share shall not be less than 100% (or 110% for owners of more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary) of the fair market value of the Common Stock at the time such Option is granted. If the Company's shares of Common Stock are: (1) actively traded on any national securities exchange or NASDAQ system that reports their sales prices, fair market value shall be the average of the high and the low sales prices per share on the date the Board or Committee grants the Option; (2) otherwise traded over the counter, fair market value shall be the average of the final bid and asked prices for the shares of Common Stock as reported for the date the Board or Committee grants the Option; or (3) not traded, the Board or Committee shall consider any factor or factors which it believes affects fair market value, and shall determine fair market value without regard to any restriction other than a restriction which by its terms will never lapse. The Board or Committee may cause fair market value to be determined by an independent third party appraiser. c. Term of Option The term of each Option granted under this Plan shall be established by the Board or Committee, but shall not exceed 10 years (or 5 years for owners of more than 10% of the total combined voting power of all classes of stock of the Company or of a Subsidiary) from the date of the grant. d. Time of Granting Options The date of grant of an Option shall, for all purposes, be the date on which the Board or Committee makes the determination of granting such Option. Notice of the determination shall be given to each director, officer or key employee to whom an Option is so granted within a reasonable time after the date of such grant. e. Cancellation and Replacement of Options The Board or Committee may at any time or from time to time permit the voluntary surrender by the holder of any outstanding Option granted under this Plan where such surrender is conditioned upon the granting under this Plan to such holder of new Option(s) for such number of shares as the Board or Committee shall determine, or may require such a voluntary surrender as a condition precedent to the grant under this Plan of new Option(s) to such holder. The Board or Committee shall determine the terms and conditions of any such new Option(s), including the prices at and periods during which they may be exercised, in accordance with the provisions of this Plan, all or any of which may differ from the terms and conditions of the Option(s) surrendered. Any such new Option(s) shall be subject to all the relevant provisions of this Plan. The shares subject to any Option so surrendered shall no longer be charged against the limitation or limitations provided in Section 3 of this Plan and may again become shares subject to the same applicable limitations of this Plan. The granting of new Option(s) in connection with the surrender of outstanding Option(s) under this Plan shall be considered for the purposes of the Plan as the grant of new Option(s) and not an alteration, amendment or modification of the Plan or of the Option(s) being surrendered. 5. NON-TRANSFERABILITY An Option granted to a participant under this Plan shall not be transferable by him or her except: (i) by will; (ii) by the laws of descent and distribution; or (iii) pursuant to a qualified domestic relations order as defined by the Code or in Title I of the Employee Retirement Income Security Act, or the rules thereunder. In the case of an Option intended to be an incentive stock option, such Option shall not be transferable by a participant other than by will or the laws of descent and distribution and during the optionee's lifetime shall be exercisable only by him or her. 6. EXERCISING OF OPTIONS Subject to the provisions of this Plan, an Option granted under this Plan shall be exercisable at such time or times after the date of grant thereof, according to such schedule and upon such conditions as may be determined by the Board or Committee at the time of grant. For a period of six months commencing on the date of grant of an Option hereunder to a participant, such participant may not sell any share(s) of Common Stock acquired upon exercise of such Option. Any Option granted under this Plan shall terminate prior to the expiration of its term on the date the optionee ceases to be a director of the Company or an employee of the Company or any Subsidiary of the Company, unless the optionee shall (a) die while a director of the Company or an employee of the Company or such Subsidiary, in which case the participant's legatee(s) under his or her last will or the participant's personal representative or representatives may exercise all or part of the previously unexercised portion of the Option at any time within one year after the participant's death to the extent the optionee could have exercised the Option immediately prior to his or her death, (b) become permanently or totally disabled within the meaning of section 22(e)(3) of the Code (or any successor provision), in which case the participant or his or her personal representative may exercise the previously unexercised portion of the Option at any time within one year after termination of his or her employment or directorship to the extent the optionee could have exercised the Option immediately prior to such termination, or (c) resign or retire with the consent of the Company, in which case the participant may exercise the previously unexercised portion of the Option at any time within three months after the participant's resignation or retirement to the extent the optionee could have exercised the Option immediately prior to such resignation or retirement. In no event may an Option be exercised after the expiration of its fixed term. 7. METHOD OF EXERCISE Each Option granted under the Plan shall be deemed exercised when the holder (a) shall indicate the decision to do so in writing delivered to the Company, (b) shall at the same time tender to the Company payment in full in cash or in shares of Common Stock at the fair market value of such shares at the time of exercise of the exercise price for the shares for which the Option is exercised, (c) shall tender to the Company payment in full in cash of the amount of all federal and state withholding or other employment taxes applicable to the taxable income, if any, of the holder resulting from such exercise, and (d) shall comply with such other reasonable requirements as the Board or Committee may establish. No person, estate or other entity shall have any of the rights of a shareholder with reference to shares subject to an Option until a certificate for the shares has been delivered. An Option granted under this Plan may be exercised for any lesser number of shares than the full amount for which it could be exercised. Such a partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with this Plan for the remaining shares subject to the Option. 8. TERMINATION OF OPTIONS An Option granted under this Plan shall be considered terminated in whole or part, to the extent that, in accordance with the provisions of this Plan and such Option, it can no longer be exercised for any shares originally subject to the Option. The shares subject to any Option or portion thereof, which terminates, shall no longer be charged against the applicable limitation or limitations provided in Section 3 of this Plan and may again become shares available for the purposes, and subject to the same applicable limitations, of this Plan. 9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION In the event of any change in the outstanding Common Stock of the Company by reason of a stock dividend, stock split, stock consolidation, recapitalization, reorganization, merger, split up or the like, the shares available for purposes of this Plan, the shares to be covered by subsequent grants under Section 3 hereof and the number and kind of shares under option in outstanding option agreements pursuant to this Plan and the option price under such agreements shall be appropriately adjusted so as to preserve, but not increase, the benefits of this Plan to the Company and the benefits to the holders of such Options; provided in the case of incentive stock options that, in the case of a corporate merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation, the excess of the aggregate fair market value of the shares subject to any Option immediately after such event over the aggregate option price of such shares is not more than the excess of the aggregate fair market value of all shares subject to the Option immediately before such event over the aggregate option price of such shares. In the event of a consolidation or a merger in which the Company is not the surviving corporation, or any other merger in which the shareholders of the Company exchange their shares of stock in the Company for stock of another corporation, or in the event of complete liquidation of the Company, or in the case of a tender offer approved by the Board of Directors, all outstanding options shall become exercisable in full immediately prior to the effective date of any such transaction, regardless of the exercise schedule. Adjustments under this Section shall be made by the Board or Committee, whose determination as to what adjustments shall be made and the extent thereof, shall be final, binding and conclusive. 10. COMPLIANCE WITH SECURITIES LAWS AND OTHER REQUIREMENTS No certificate(s) for shares shall be executed and delivered upon exercise of an Option until the Company shall have taken such action, if any, as is then required to comply with the provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the South Carolina Uniform Securities Act, as amended, any other applicable state securities law(s) and the requirements of any exchange on which the Common Stock may, at the time, be listed. In the case of the exercise of an Option by a person or estate acquiring the right to exercise the Option by bequest or inheritance, the Board or Committee may require reasonable evidence as to the ownership of the Option and may require such consents and releases of taxing authorities as it may deem advisable. 11. NO RIGHT TO EMPLOYMENT Neither the adoption of the Plan nor its operation, nor any document describing or referring to the Plan, or any part thereof, shall confer upon any employee participant under the Plan any right to continue in the employ of the Company, or upon any director participant under the Plan any right to continue as a director of the Company, or shall in any way affect the right and power of the Company to terminate the employment or position with the Company of any participant under this Plan at any time with or without assigning a reason therefor, to the same extent as the Company might have done if this Plan had not been adopted. 12. AMENDMENT AND TERMINATION The Board or Committee may at any time suspend, amend or terminate this Plan. The Board or Committee may make such modifications of the terms and conditions of a holder's Option as it shall deem advisable. No Option may be granted during any suspension of the Plan or after such termination. Notwithstanding the foregoing provisions of this Section, no amendment, suspension or termination shall, without the consent of the holder of an Option, alter or impair any rights or obligations under any Option theretofore granted under the Plan. In addition to Board or Committee approval of an amendment, if the amendment would: (i) materially increase the benefits accruing to participants; (ii) increase the number of securities issuable under this Plan; (iii) change the class or classes of individuals eligible to receive Options; or (iv) otherwise materially modify the requirements for eligibility, then such amendment must be approved by the holders of a majority of the Company's outstanding capital stock present or represented by proxy and entitled to vote at a meeting duly held of the stockholders of the Company. 13. USE OF PROCEEDS The proceeds received by the Company from the sale of shares pursuant to Options granted under the Plan shall be used for general corporate purposes as determined by the Board. 14. INDEMNIFICATION OF BOARD OR COMMITTEE In addition to such other rights of indemnification as they may have as members of the Board, the members of the Board or Committee shall, to the fullest extent permitted by law, be indemnified by the Company against the reasonable expenses, including attorney's fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Option granted thereunder, and against all amounts paid by them in settlement thereof (provided the settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Board member or Committee member is liable for gross negligence or misconduct in the performance of his duties; provided that within 60 days after institution of any such action, suit or proceeding the Board member or Committee member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. 15. EFFECTIVE DATE OF THE PLAN This Plan was adopted by the Board of the Company on December 9, 1997 and shall be effective as of December 9, 1997, subject to its approval by the appropriate shareholder vote at the next ensuing annual meeting of shareholders of the Company. 16. DURATION OF THE PLAN Unless previously terminated by the Board or Committee, this Plan shall terminate at the close of business on December 8, 2007, and no Option shall be granted under it thereafter, but such termination shall not affect any Option theretofore granted under this Plan. Amended and Restated Effective April 15, 2003 EX-99 7 exhibit99-2.txt EXHIBIT 99.2 Exhibit 99.2 ARTICLE 5. INDEMNIFICATION SECTION 33-8-500. Article definitions. In this subchapter: (1) "Corporation" includes any domestic or foreign predecessor entity of a corporation in a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction. (2) "Director" means an individual who is or was a director of a corporation or an individual who, while a director of a corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise. A director is considered to be serving an employee benefit plan at the corporation's request if his duties to the corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. "Director" includes, unless the context requires otherwise, the estate or personal representative of a director. (3) "Expenses" include counsel fees. (4) "Liability" means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding. (5) "Official capacity" means: (i) when used with respect to a director, the office of director in a corporation; and (ii) when used with respect to an individual other than a director, as contemplated in Section 33-8-560, the office in a corporation held by the officer, or the employment or agency relationship undertaken by the employee or agent on behalf of the corporation. "Official capacity" does not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, employee benefit plan, or other enterprise. (6) "Party" includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding. (7) "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal. SECTION 33-8-510. Authority to indemnify. (a) Except as provided in subsection (d), a corporation may indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if: (1) he conducted himself in good faith; and (2) he reasonably believed: (i) in the case of conduct in his official capacity with the corporation, that his conduct was in its best interest; and (ii) in all other cases, that his conduct was at least not opposed to its best interest; and (3) in the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. (b) A director's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection (a)(2)(ii). (c) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section. (d) A corporation may not indemnify a director under this section: (1) in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or (2) in connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. (e) Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding. SECTION 33-8-520. Mandatory indemnification. Unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding. SECTION 33-8-530. Advance for expenses. (a) A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: (1) the director furnishes the corporation a written affirmation of his good faith belief that he has met the standard of conduct described in Section 33-8-510; (2) the director furnishes the corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and (3) a determination is made that the facts then known to those making the determination would not preclude indemnification under this subchapter. (b) The undertaking required by subsection (a)(2) must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment. (c) Determinations and authorizations of payments under this section must be made in the manner specified in Section 33-8-550. SECTION 33-8-540. Court-ordered indemnification. Unless a corporation's articles of incorporation provide otherwise, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification if it determines: (1) the director is entitled to mandatory indemnification under Section 33-8-520, in which case the court also shall order the corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; or (2) the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standard of conduct set forth in Section 33-8-510 or was adjudged liable as described in Section 33-8-510(d), but if he was adjudged so liable his indemnification is limited to reasonable expenses incurred. SECTION 33-8-550. Determination and authorization of indemnification. (a) A corporation may not indemnify a director under Section 33-8-510 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he has met the standard of conduct set forth in Section 33-8-510. (b) The determination must be made: (1) by the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding; (2) if a quorum cannot be obtained under subdivision (1), by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding; (3) by special legal counsel: (i) selected by the board of directors or its committee in the manner prescribed in item (1) or (2); or (ii) if a quorum of the board of directors cannot be obtained under subdivision (1) and a committee cannot be designated under subdivision (2), selected by majority vote of the full board of directors (in which selection directors who are parties may participate); or (4) by the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination. (c) Authorization of indemnification and evaluation as to reasonableness of expenses must be made in the same manner as the determination that indemnification is permissible, except that, if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses must be made by those entitled under subsection (b)(3) to select counsel. SECTION 33-8-560. Indemnification of officers, employees, and agents. Unless a corporation's articles of incorporation provide otherwise: (1) an officer of the corporation who is not a director is entitled to mandatory indemnification under Section 33-8-520, and is entitled to apply for court-ordered indemnification under Section 33-8-540, in each case to the same extent as a director; (2) the corporation may indemnify and advance expenses under this subchapter to an officer, employee, or agent of the corporation who is not a director to the same extent as to a director; and (3) a corporation also may indemnify and advance expenses to an officer, employee, or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, general or specific action of its board of directors, or contract. SECTION 33-8-570. Insurance. A corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee, or agent, whether or not the corporation would have power to indemnify him against the same liability under Section 33-8-510 or 33-8-520. SECTION 33-8-580. Application of article. (a) A provision treating a corporation's indemnification of or advance for expenses to directors that is contained in its articles of incorporation, bylaws, a resolution of its shareholders or board of directors, or in a contract or otherwise is valid only if and to the extent the provision is consistent with this article. If articles of incorporation limit indemnification or advance for expenses, indemnification and advance for expenses are valid only to the extent consistent with the articles. (b) This article does not limit a corporation's power to pay or reimburse expenses incurred by a director in connection with his appearance as a witness in a proceeding at a time when he has not been made a named defendant or respondent to the proceeding. -----END PRIVACY-ENHANCED MESSAGE-----