Exhibit 10.12

 

2009 COASTAL CAROLINA BANCSHARES, INC.

STOCK INCENTIVE PLAN

 

ARTICLE I

PURPOSE; EFFECTIVE DATE; DEFINITIONS

 

1.1                                 Purpose. The Coastal Carolina
Bancshares, Inc. Stock Incentive Plan (the “Plan”) is intended to secure for
Coastal Carolina Bancshares, Inc., a South Carolina corporation (the “Company”),
and its shareholders the benefits of the incentive inherent in common stock
ownership by the employees of the Company who are largely responsible for the
Company’s future growth and continued financial success and to afford such
persons the opportunity to obtain or increase their proprietary interest in the
Company on a favorable basis and thereby have an opportunity to share in its
success.

 

1.2                                 Effective Date. Subject to shareholder
approval and required regulatory approval with respect to the provisions herein
related to grants of restricted stock, the Plan shall become effective as of the
date that the Company’s proposed national bank subsidiary first opens for
business (the “Effective Date”).

 

1.3                                 Definitions. Throughout the Plan, the
following terms shall have the meanings indicated:

(a)                                  “Agreement” shall mean an Option Agreement
or a Restricted Stock Agreement.

 

(b)                                 “Benefits” shall mean any one or more of the
following awards that may be offered by the Committee to Employees under the
Plan:

(i) Options (including ISOs and NQSOs); or

(ii) Restricted Stock.

 

(c)                                  “Board” shall mean the Board of Directors
of the Company.

 

(d)                                 “Business Combination” shall mean a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company or the Company’s acquisition of
assets of another corporation, partnership or limited liability company.

 

(e)                                  “Change of Control” shall mean:

 

(1)                                  The acquisition by a Person of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (i) the Outstanding Company Common Stock or (ii) the
Outstanding Company Voting Securities; provided, however, that for purposes of
this subsection (1), the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Company, (ii) any acquisition by
the Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (3) of this
Section 1.3(c); or

 

(2)                                  Individuals who, as of the Effective Date,
constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Date whose election, or
nomination for election by the Company’s shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than a
member of the Board; or

 

(1)          Consummation of a Business Combination, in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the

 

--------------------------------------------------------------------------------

 

then outstanding shares of common stock or comparable interests if such
resulting entity is not a corporation and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors or comparable management group, as the case may be, of the corporation
or other entity resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company
or all or substantially all of the Company’s assets either directly or through
one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (ii) no Person (excluding any corporation or other entity resulting from
such Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation or other entity resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock or comparable
interests of the corporation or other entity resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors or comparable
management group of such corporation or other entity except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the Board of Directors or comparable management group
of the corporation or other entity resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

 

(4)                                  Approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company.

 

(f)                                    “Code” shall mean the Internal Revenue
Code of 1986, as amended, any successor revenue laws of the United States and
the rules and regulations promulgated thereunder.

 

(g)                                 “Committee” shall mean any committee of the
Board designated by the Board to administer the Plan.

 

(h)                                 “Common Stock” shall mean the common stock,
par value $.01 per share, of the Company.

 

(i)                                     “Company” shall have the meaning set
forth in Section 1.1 above.

 

(j)                                     “Effective Date” shall have the meaning
set forth in Section 1.2 above.

 

(k)                                  “Employee” shall mean any person engaged or
proposed to be engaged as an officer or employee of the Company or any
subsidiary thereof.

 

(l)                                     “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.

 

(m)                               “Fair Market Value” on any date with respect
to the Common Stock shall mean:

(1)  if the Common Stock is listed on a national securities exchange, the last
reported sale price of a share of the Common Stock on such exchange or, if no
sale occurs on that date, the average of the reported closing bid and asked
prices on that date;

(2)  if the Common Stock is otherwise publicly traded, the last reported sale
price of a share of the Common Stock under the quotation system under which the
sale price is reported or, if no sale occurs on that date, the average of the
reported closing bid and asked prices on that date under the quotation system
under which the bid and asked prices are reported;

(3)  if no such last sales price or average of the reported closing bid and
asked prices are available on that date, the last reported sale price of a share
of the Common Stock, or if no sale takes place, the average of the reported
closing bid and asked prices as so reported for the immediately preceding
business day (i) on the national securities exchange on which the Common Stock
is listed or (ii) if the Common Stock is otherwise publicly traded, under the
quotation system under which such data are reported, or

(4)  if none of the prices described above is available, the value of a share of
the Common Stock as reasonably determined in good faith by the Committee in a
manner that it believes to be in accordance with the Code.

 

--------------------------------------------------------------------------------

 

In determining the Fair Market Value of a share of Common Stock in connection
with the issuance of an ISO (as defined below), the Fair Market Value shall be
determined without regard to any restriction, other than a restriction that, by
its terms, will never lapse.

 

(n)                                 “ISO” shall mean an Option that qualifies as
an incentive stock option under Section 422 of the Code and is not otherwise
designated when granted. No Option that is intended to be an ISO shall be
invalid under the Plan for failure to qualify as an ISO.

 

(o)                                 “NQSO” shall mean a nonqualified stock
option which is an Option that does not qualify as an incentive stock option
under Section 422 of the Code. An option will be a NQSO if it does not satisfy
the requirements of an ISO or if it is designated as a NQSO when granted.

 

(p)                                 “Option” shall mean an option to purchase
shares of Common Stock granted by the Committee to an Employee pursuant to the
Plan. An Option may be an ISO or an NQSO.

 

(q)                                 “Option Agreement” shall mean an agreement
between the Company and an Employee evidencing an Option grant.

 

(r)                                    “Option Shares” shall mean the shares of
Common Stock purchased upon exercise of an Option.

 

(s)                                  “Outstanding Company Common Stock” shall
mean, as of any date, the then outstanding shares of Common Stock.

 

(t)                                    “Outstanding Company Voting Securities”
shall mean, as of any date, the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors.

 

(u)                                 “Plan” shall mean the 2009 Coastal Carolina
Bancshares, Inc. Stock Incentive Plan, as the same may be amended from time to
time.

 

(v)                                 “Person” shall mean any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act).

 

(w)                               “Restricted Stock” shall mean Common Stock
granted under Article V of the Plan, subject to such restrictions as the
Committee may determine, as evidenced in a Restricted Stock Agreement. Shares of
Common Stock shall cease to be Restricted Stock when, in accordance with the
terms of the Restricted Stock Agreement, they become transferable and free of
substantial risk of forfeiture.

 

(x)                                   “Restricted Stock Agreement” shall mean an
agreement between the Company and an Employee pursuant to which Restricted Stock
is issued to the Employee pursuant to the Plan.

 

(y)                                 “Restriction Period” shall mean the time
period during which Restricted Stock is subject to the restrictions set forth in
a Restricted Stock Agreement.

 

(z)                                “10% Shareholder” shall mean an individual
owning (directly or by attribution as provided in Section 424(d) of the Code)
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company.

 

ARTICLE II

ADMINISTRATION

 

2.1                                 Committee Administration. The Plan and the
Benefits awarded hereunder shall be interpreted, construed and administered by
the Committee in its sole discretion. An Employee eligible to receive Benefits
under the Plan may appeal to the Committee in writing any decision or action of
the Committee with respect to the Plan that adversely affects the Employee. Upon
review of such appeal and in any other case where the Committee has acted with
respect to the Plan, the interpretation and construction by the Committee of any
provisions of the Plan or of any Benefit shall be conclusive and binding on all
parties.  Notwithstanding any other provision herein to the

 

--------------------------------------------------------------------------------

 

contrary, this Plan shall be administered in accordance with the provisions of
applicable regulatory agencies’ policies relating to stock benefit plans.

 

2.2                                 Committee Composition. The Committee shall
consist of not less than two persons who shall be members of the Board and shall
be subject to such terms and conditions as the Board may prescribe. Each
Committee member shall be a “non-employee director” within the meaning of
Rule 16b-3 promulgated under the Exchange Act and an “outside director” as
defined in Section 1.162-27(e)(3) of the Code. Once designated, the Committee
shall continue to serve until otherwise directed by the Board. From time to
time, the Board may increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies however caused and remove all members
of the Committee.

 

A majority of the entire Committee shall constitute a quorum, and the action of
a majority of the members present at any meeting at which a quorum is present
shall be deemed the action of the Committee. In addition, any decision or
determination reduced to writing and signed by all of the members of the
Committee shall be fully as effective as if it had been made by a majority vote
at a meeting duly called and held. Subject to the provisions of the Plan and the
Company’s bylaws, and to any terms and conditions prescribed by the Board, the
Committee may make such additional rules and regulations for the conduct of its
business as it shall deem advisable. The Committee shall hold meetings at such
times and places as it may determine.

 

2.3                                 Committee Powers. The Committee shall have
authority to award Restricted Stock and to grant Options pursuant to an
Agreement providing for such terms (not inconsistent with the provisions of the
Plan) as the Committee may consider appropriate. Such terms shall include,
without limitation, as applicable, the number of shares, the Option price, the
medium and time of payment, the term of each award and any vesting requirements
and may include conditions (in addition to those contained in the Plan) on the
exercisability of all or any part of an Option or on the transferability or
forfeitability of Restricted Stock. Notwithstanding any such conditions, the
Committee may, in its discretion, accelerate the time at which any Option may be
exercised or the time at which Restricted Stock may become transferable or
nonforfeitable. In addition, the Committee shall have complete discretionary
authority to prescribe the form of Agreements; to adopt, amend and rescind
rules and regulations pertaining to the administration of the Plan; and to make
all other determinations necessary or advisable for the administration of the
Plan. The express grant in the Plan of any specific power to the Committee shall
not be construed as limiting any power or authority of the Committee. All
expenses of administering the Plan shall be borne by the Company.

 

2.4                                 Limitation on Receipt of Benefits by
Committee Members. No person while a member of the Committee shall be eligible
to receive Benefits under the Plan, but a member of the Committee may exercise
Options granted hereunder prior to his or her becoming a member of the
Committee.

 

2.5                                 Good Faith Determinations. No member of the
Committee or other member of the Board shall be liable for any action or
determination made in good faith with respect to the Plan or any Benefit granted
hereunder.

 

ARTICLE III

ELIGIBILITY; TYPES OF BENEFITS; SHARES SUBJECT TO PLAN

 

3.1                                 Eligibility. The Committee shall from time
to time determine and designate the Employees of the Company to receive Benefits
under the Plan and the number of Options and shares of Restricted Stock to be
awarded to each such Employee, or the formula or other basis on which such
Benefits shall be awarded to Employees. In making any such award, the Committee
may take into account the nature of services rendered by an Employee,
commissions or other compensation earned by the Employee, the capacity of the
Employee to contribute to the success of the Company and other factors that the
Committee may consider relevant.

 

3.2                                 Types of Benefits. Benefits under the Plan
may be granted in any one or any combination of Options and Restricted Stock.
The Committee may award Benefits subject to any condition or conditions
consistent with the terms of the Plan that the Committee in its sole discretion
may consider appropriate.

 

3.3                                 Shares Subject to the Plan. Subject to the
provisions of Section 4.1(e) (relating to adjustment for changes in Common
Stock), the maximum number of shares that may be issued or reserved for issuance
under the Plan, or issued as ISOs, or that may be issued to any one person under
the Plan shall not exceed in the aggregate

 

--------------------------------------------------------------------------------

 

161,778 shares of Common Stock, as such number of shares may be adjusted after
the Effective Date pursuant to Section 4.1(e).  The maximum number of shares of
Restricted Stock that may be issued under the Plan shall not exceed 109,000, 5%
of the number of shares issued in the Company’s initial public offering.  All
shares issued under the Plan may be authorized and unissued shares or authorized
and issued shares that have been reacquired by the Company. If any Options
granted under the Plan shall for any reason terminate or expire or be
surrendered without having been exercised in full, the shares not purchased
under such Options shall be available again for grant hereunder.  Upon
forfeiture (in whole or in part) of Restricted Stock, the shares of Common Stock
forfeited shall be available again for grant under the Plan.

 

ARTICLE IV

STOCK OPTIONS

 

4.1                                 Grant; Terms and Conditions. The Committee,
in its discretion, may from time to time grant ISOs and/or NQSOs to any Employee
eligible to receive Benefits under the Plan. Each Employee who is granted an
Option shall enter into an Option Agreement with the Company in a form specified
by the Committee and containing such provisions as the Committee, in its sole
discretion, shall from time to time approve consistent with the Plan. The Option
Agreements need not be identical, but each Option Agreement by appropriate
language shall include the substance of all of the following terms and
conditions:

 

(a)                                  Number of Shares. Each Option Agreement
shall state the number of shares to which it pertains.

 

(b)                                 Option Exercise Price. Each Option Agreement
shall state the Option exercise price, which shall not be less than 100% of the
Fair Market Value of the shares of Common Stock subject to the Option on the
date of granting the Option. In the case of an ISO granted to a 10% Shareholder,
the price at which each share of Common Stock covered by the Option may be
purchased shall not be less than 110% of the Fair Market Value per share of
Common Stock on the date of grant of the Option. The date of the grant of an
Option shall be the date specified by the Committee in its grant of the Option.

 

(c)                                  Medium and Time of Payment. Upon the
exercise of an Option, the Option exercise price shall be payable in United
States dollars, in cash, by wire transfer, by certified or bank cashier’s check
or by personal check drawn on funds on deposit with Coastal Carolina National
Bank. An Option shall be deemed to be exercised on the date that the Company
receives full payment of the exercise price for the number of shares for which
the Option is being exercised.

 

(d)                                 Exercisability and Term of Options. Every
Option Agreement shall provide that, unless earlier terminated and subject to
any vesting provision, Options granted pursuant to the Plan shall be exercisable
at any time on or after the dates set forth in the Option Agreement and before
the date that is ten years after the date of the grant or, in the case of an ISO
granted to a 10% Shareholder, before the date that is five years after the date
of grant. An Option Agreement may in the discretion of the Committee contain
provisions relating to vesting of Options.  Each Option Agreement may provide
for acceleration of exercisability in the event of death or permanent and total
disability (as defined in Section 22(e)(3) of the Code).  In addition, any
Option Agreement with any employee who has an employment agreement with the
Company or one of its subsidiaries may provide for acceleration of
exercisability upon termination of the employee’s employment without “Cause” or
for “Good Reason” as such terms are defined in the applicable employment
agreement.  Notwithstanding the foregoing, (i) in the event of a Change of
Control of the type set forth in paragraph (1), (2) or (4) of the definition of
Change of Control and (ii) immediately prior to the occurrence of a Change of
Control of the type set forth in paragraph (3) of the definition of Change of
Control, each Option outstanding under the Plan shall become exercisable in
whole or in part without regard to any vesting provisions set forth in the
related Option Agreement provided such Change of Control, other than a
dissolution or liquidation, does not occur prior to the third anniversary of the
opening of Coastal Carolina National Bank, the Company’s wholly owned subsidiary
(the “Bank”).  The last three sentences shall apply to any outstanding Options
which are ISOs to the extent permitted by Section 422(d) of the Code, and such
outstanding ISOs in excess thereof shall, immediately upon the occurrence of the
event described in such sentence, be treated for all purposes of the Plan as
NQSOs and shall be immediately exercisable as such as provided in such sentence.

 

During the lifetime of the optionee, the Option shall be exercisable only by him
or her and shall not be assignable or transferrable by him or her and no person
shall acquire any rights therein. An Option may be

 

--------------------------------------------------------------------------------

 

transferred (unless the Committee otherwise prescribes) by will or the laws of
descent and distribution.

 

Notwithstanding the foregoing, an Option shall terminate and may not be
exercised if the Employee to whom it is granted ceases to be employed by the
Company, except that the Option Agreement may, in the discretion of the
Committee, provide:

 

(1)                                  that, if such Employee’s employment
terminates for any reason, the Employee may at any time within three months
after termination of his or her employment exercise his or her Option but only
to the extent the Option was exercisable by him or her on the date of
termination of employment;

 

(2)                            that, if such Employee’s employment terminates on
account of permanent and total disability (as defined in Section 22(e)(3) of the
Code), then the Employee may at any time within one year after termination of
his or her employment exercise his or her Option but only to the extent that the
Option was exercisable on the date of termination of employment; and

 

(3)                            that, if such Employee dies while in the employ
of the Company, or within the three month or one year period following
termination of his or her employment as described in clause (1) or (2) above,
then his or her Option may be exercised at any time within one year following
his or her death by the person or persons to whom his or her rights under the
Option shall pass by will or by the laws of descent and distribution, but only
to the extent that such Option was exercisable by him or her on the date of
termination of employment.

 

Notwithstanding the foregoing, if approval of shareholders has not been obtained
as required by Section 6.9 at the time the Employee ceases to be employed by the
Company, the Option Agreement may, in the discretion of the Committee and
subject to such conditions as the Committee may determine, provide that the time
periods described in clauses (1), (2) and (3) shall not begin to run until the
approval of shareholders has been obtained and the time period shall extend for
up to eight months or such shorter period of time as management of the Company
may determine.

 

Any cessation of employment, for purposes of ISOs only, shall include any leave
of absence in excess of 90 days unless the optionee’s reemployment rights are
guaranteed by law or by contract. Notwithstanding anything to the contrary in
this section, an Option may not be exercised by anyone after the expiration of
its term. Not less than 100 shares may be purchased at any one time unless the
number purchased is the total number at the time purchasable under the Option.

 

(e)                                  Recapitalization; Reorganization. Subject
to any required action by the shareholders of the Company, the maximum number of
shares of Common Stock that may be issued under the Plan pursuant to Section 3.3
above, the number of shares of Common Stock covered by each outstanding Option,
the kind of shares subject to outstanding Options and the per share exercise
price under each outstanding Option shall be adjusted, in each case, to the
extent and in the manner the Committee deems appropriate for any increase or
decrease in the number of issued shares of Common Stock resulting from a
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, rights offering, subdivision or consolidation of
shares or the payment of a stock dividend (but only on the Common Stock) or any
other change in the corporate structure or shares of the Company.

 

Subject to any action required by the shareholders, in the event of a Business
Combination that does not result in a Change of Control, each outstanding Option
shall pertain to and apply to the securities or other consideration that a
holder of the number of shares of Common Stock subject to the Option would have
been entitled to receive in the Business Combination.  In the event of a
Business Combination that results in a  Change of Control of the type set forth
in paragraph (3) of the definition of Change of Control or in the event of the
complete liquidation or dissolution of the Company, then each outstanding Option
shall terminate; provided, however, that each holder thereof shall, in such
event, have the right immediately prior to such Change of Control (provided it
takes place on or after the third anniversary of the opening of the Bank) or
complete liquidation or dissolution, to exercise his or her Option in whole or
in part without regard to any installment provision that might be contained in
the applicable Agreement.  The last sentence shall apply to any outstanding
Options which are ISOs to the extent permitted by Section 422(d) of the Code,
and such outstanding ISO’s in excess thereof shall, immediately upon the
occurrence of such Business Combination, be treated for all purposes of the Plan
as NQSOs and shall be immediately exercisable as such as provided in such
sentence.  Notwithstanding the foregoing, in no event shall any

 

--------------------------------------------------------------------------------

 

Option be exercisable after the date of termination of the exercise period of
such Option.

 

In the event of a change in the Common Stock as presently constituted, which
change is limited to a change of all of the authorized shares with par value
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 shares of Common
Stock within the meaning of the Plan.

 

The foregoing adjustments shall be made by the Committee, whose determination
shall be final, binding and conclusive.

 

Except as expressly provided in this section, the holder of an Option shall have
no rights by reason of (i) any subdivision or consolidation of shares of any
class, (ii) any stock dividend, (iii) any other increase or decrease in the
number of shares of stock of any class, (iv) any dissolution, liquidation,
merger, consolidation, spin-off, split-off or split-up of assets of the Company
or stock of another corporation or (v) any issuance by the Company of shares of
stock of any class or securities convertible into shares of stock of any class.
Moreover, except as expressly provided in this section, the occurrence of one or
more of such events shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number of or exercise price of shares of Common
Stock subject to an Option.

 

The grant of an Option pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve or liquidate or to sell or otherwise transfer all
or any part of its business or assets.

 

(f)                                    Rights as a Shareholder. Subject to
Section 5.10 below regarding uncertificated shares, an optionee or a transferee
of an Option shall have no rights as a shareholder with respect to any shares
covered by his or her Option until the date of the issuance of a stock
certificate to him or her for those shares upon payment of the exercise price.
No adjustments shall be made for dividends (ordinary or extraordinary, whether
in cash, securities or other property) or distributions or other rights for
which the record date is prior to the date such stock certificate is issued,
except as provided in subsection 4.1(e).

 

(g)                                 Modification, Extension and Renewal of
Options. Subject to the terms and conditions and within the limitations of the
Plan, the Committee may modify, extend or renew outstanding Options granted
under the Plan or accept the surrender of outstanding Options (to the extent not
theretofore exercised) and authorize the granting of new Options in substitution
therefor (to the extent not theretofore exercised). No modification of an Option
shall, without the consent of the optionee, alter or impair any rights or
obligations under any Option theretofore granted under the Plan.

 

4.2                                 Other Terms and Conditions. Through the
Option Agreements authorized under the Plan, the Committee may impose such other
terms and conditions, not inconsistent with the terms hereof, on the grant or
exercise of Options, as it deems advisable.

 

4.3                                 Additional Provisions Applicable to
Incentive Stock Options. The Committee may, in its discretion, grant options
under the Plan to eligible Employees which Options constitute ISOs; provided,
however, that the aggregate Fair Market Value of the Common Stock with respect
to which ISOs are exercisable for the first time by the optionee during any
calendar year shall not exceed the limitation set forth in Section 422(d) of the
Code. The Committee may require an optionee to notify the Company promptly if
there is a disqualifying disposition, as defined in Section 422 of the Code, of
any shares received through the exercise of an ISO. The Company also may insert
a legend on any certificate evidencing shares of Common Stock issued pursuant to
an ISO requiring the transfer agent to report to the Company any transfer of
such shares within one year of exercise or two years of grant.

 

4.4                                                Capital Requirements.

 

(a)  The Company and/or any bank subsidiary of the Company may be required to
increase its or their capital to meet capital requirements imposed by statute,
rule, regulation or guideline. In order to achieve such capital increase, a
regulatory agency may direct the Company to require an Option holder to either
(i) exercise or forfeit all or part of his Options or (ii) allow the Options to
be terminated. If a regulatory agency so directs the

 

--------------------------------------------------------------------------------

 

Company, then the Option holder must exercise or forfeit his Options as set
forth below, subject to the terms set forth herein and in the Option Agreement.

 

(b)  When the Company and/or any bank subsidiary of the Company are required to
increase its or their capital as described in subsection (a) above, the Company
shall send a notice (the “Notice”) to each option holder (i) specifying the
number of shares for which the Options must be exercised (the “Number”);
(ii) specifying the date prior to which the Options must be totally or partially
exercised, as the case may be (the “Deadline”); and (iii) stating that the
failure of the Option holder to exercise the Options shall result in their
automatic termination.  If less than all shares relating to warrants and options
held by all holders of warrants or options of the Company under agreements
containing a provision substantially similar to this one are required by the
Company to be exercised or cancelled, the Number for each Option holder shall
reflect a proportionate allocation based on the number of shares of Common Stock
subject to his Option as compared to the total number of shares subject to
warrants and options held by persons holding warrants or options with such a
provision as a group.

 

(c)  If the Option holder does not exercise the Options pursuant to the terms of
the Notice, the Options shall be automatically terminated on the Deadline,
without further act or action by the Option holder or the Company, and the
Option holder shall deliver his Option Agreement to the Company for
cancellation; however, a failure to cancel an Option Agreement for any reason
(including non-delivery to the Company) shall not effect such termination. If
the Number is less than the total number of shares that are then subject to
exercise under the Option holder’s Option Agreement, the Company shall issue a
new Option Agreement with respect to the shares remaining covered thereby.

 

ARTICLE V

RESTRICTED STOCK

 

5.1                                 Grant; Terms and Conditions.  The Committee,
in its discretion, may from time to time award Restricted Stock to any Employee
eligible to receive Benefits under the Plan. Each Employee who is awarded
Restricted Stock shall enter into a Restricted Stock Agreement with the Company
in a form specified by the Committee agreeing to the terms and conditions of the
award and such other matters consistent with the Plan as the Committee in its
sole discretion shall determine. Such conditions may include, but shall not be
limited to, the deferral of a percentage of the Employee’s annual cash
compensation, not including dividends paid on Restricted Stock, if any, to be
applied toward the purchase of Restricted Stock upon such terms and conditions,
including such discounts, as may be set forth in the Restricted Stock Agreement.

 

Restricted Stock awarded to Employees may not be sold, transferred, pledged or
otherwise encumbered during a Restriction Period commencing on the date of the
award and ending at such later date or dates as the Committee may designate at
the time of the award.  Notwithstanding the foregoing, the Restriction Period
shall end (i) upon a Change of Control of the type set forth in paragraph (1),
(2) or (4) of the definition of Change of Control and (ii) immediately prior to
a Change of Control of the type set forth in paragraph (3) of the definition of
Change of Control provided such Change of Control, other than a dissolution or
liquidation, does not occur prior to the third anniversary of the opening of the
Bank.  The Employee shall have the entire beneficial ownership of the Restricted
Stock awarded to him or her, including the right to receive dividends and the
right to vote such Restricted Stock.

 

If an Employee ceases to be employed by the Company prior to the expiration of
the Restriction Period, then he or she shall forfeit all of his or her
Restricted Stock with respect to which the Restriction Period has not yet
expired; provided, however, that the Restricted Stock Agreements, in the
discretion of the Committee and pursuant to such terms and conditions as it may
impose, may provide: (1) that, if such Employee’s employment terminates on
account of permanent and total disability (as defined in Section 22(e)(3) of the
Code), that the Restriction Period shall expire and that the Employee shall not
forfeit his or her Restricted Stock or any related compensation deferral or a
portion thereof; and (2) that, if such Employee dies while employed by the
Company, that the Restriction Period shall expire and that none of his or her
Restricted Stock or any related compensation deferral or a portion thereof shall
be forfeited.  In addition, any Restricted Stock Agreement with an employee who
has an employment agreement with the Company or any subsidiary may, in the
discretion of the Committee and pursuant to such terms and conditions as it may
impose, provide for the expiration of the Restricted Period upon the termination
of the employee’s employment without “Cause” or for “Good Reason” as such terms
are defined in the applicable employment agreement.

 

Subject to Section 6.10, each Employee who is awarded Restricted Stock may, but
need not, be issued a stock certificate in respect of such shares of Restricted
Stock. Each certificate registered in the name of an

 

--------------------------------------------------------------------------------

 

Employee, if any, shall bear an appropriate legend referring to the terms,
conditions and restrictions applicable to such award as specifically set forth
in the Restricted Stock Agreement.

 

The Committee shall require that any stock certificate issued in the name of an
Employee evidencing shares of Restricted Stock be held in the custody of the
Company until the expiration of the Restriction Period applicable to such
Restricted Stock and that, as a condition of such issuance of a certificate for
Restricted Stock, the Employee shall have delivered a stock power, endorsed in
blank, relating to the shares covered by such certificate. In no event shall the
Restriction Period end prior to the payment by the Employee to the Company of
the amount of any federal, state or local income or employment tax withholding
that may be required with respect to the Restricted Stock.

 

5.2                                 Recapitalization; Reorganization.  If any
change is made in the Common Stock by reason of any Business Combination that
does not result in a Change of Control or any recapitalization, stock dividend,
split up or combination of shares, then any shares received by an Employee with
respect to Restricted Stock shall be subject to the same restrictions applicable
to such Restricted Stock and the certificates representing such shares shall be
deposited with the Company.

 

ARTICLE VI

MISCELLANEOUS

 

6.1                                 Withholding Taxes. An Employee granted
Options and Restricted Stock under the Plan shall be conclusively deemed to have
authorized the Company to withhold from the salary, commissions or other
compensation of such Employee funds in amounts or property (including Common
Stock) in value equal to any federal, state and local income, employment or
other withholding taxes applicable to the income recognized by such Employee and
attributable to the Options or Option Shares or Restricted Stock as, when and to
the extent, if any, required by law; provided, however, that, in lieu of the
withholding of federal, state and local taxes as herein provided, the Company
may require that the Employee (or other person exercising such Option or holding
such Restricted Stock) pay the Company an amount equal to the federal, state and
local withholding taxes on such income at the time such withholding is required
or such other time as shall be satisfactory to the Company; and provided
further, that as an alternative to complying with withholding requirements as
provided above in this sentence, an optionee may elect by written notice to the
Company at the time of exercise of an Option to have the number of shares of
Common Stock delivered in connection with such exercise reduced by such number
of shares such that the Fair Market Value of such shares that are not delivered
shall be equal to the required withholding (but in no event in excess of
withholding resulting from using the maximum marginal federal and state tax
rates in effect).

 

6.2                                 Amendment, Suspension, Discontinuance or
Termination of Plan. The Committee may from time to time amend, suspend or
discontinue the Plan or revise it in any respect whatsoever for the purpose of
maintaining or improving the effectiveness of the Plan as an incentive device,
for the purpose of conforming the Plan to applicable governmental regulations or
to any change in applicable law or regulations or for any other purpose
permitted by law; provided, however, that no such action by the Committee shall
adversely affect any Benefit theretofore granted under the Plan without the
consent of the holder so affected; and provided further that the Committee may
not materially increase the number of shares of Common Stock authorized under
Section 3.3 of the Plan or materially modify the Plan’s requirements as to
eligibility for participation without the approval of the shareholders of the
Company.

 

6.3                                 Governing Law. The Plan and all rights and
obligations hereunder shall be construed in accordance with and governed by the
laws of the State of South Carolina.

 

6.4                                 Designation. The Plan may be referred to in
other documents and instruments as the “2009 Coastal Carolina Bancshares, Inc.
Stock Incentive Plan.”

 

6.5                                 Indemnification of Committee. In addition to
such other rights of indemnification as they may have as directors or as members
of the Committee, the members of the Committee shall be indemnified by the
Company against the reasonable expenses, including attorneys’ fees, actually and
necessarily incurred in connection with the defense of any investigation,
action, suit or proceeding, or in connection with any appeal therefrom, 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 Benefit, and against all amounts
paid by them in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in or dismissal or other discontinuance of any such
investigation, action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such investigation, action, suit or proceeding
that such Committee member is liable for negligence or misconduct in the
performance of his or her duties; provided that,

 

--------------------------------------------------------------------------------

 

within 60 days after institution of any such investigation, action, suit or
proceeding, a Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.

 

6.6                                 Reservation of Shares. The Company shall at
all times during the term of the Plan, and so long as any Benefit shall be
outstanding, reserve and keep available (and will seek or obtain from any
regulatory body having jurisdiction any requisite authority in order to issue)
such number of shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plan. Inability of the Company to obtain from any regulatory
body of appropriate jurisdiction authority considered by the Company to be
necessary or desirable to the lawful issuance of any shares of its Common Stock
hereunder shall relieve the Company of any liability in respect of the
nonissuance or sale of such Common Stock as to which such requisite authority
shall not have been obtained.

 

6.7                                 Application of Funds. The proceeds received
by the Company from the sale of Common Stock pursuant to Options will be used
for general corporate purposes.

 

6.8                                 No Obligation to Exercise. The granting of a
Benefit shall impose no obligation upon the holder to exercise or otherwise
realize the value of that Benefit.

 

6.9                                 Approval of Shareholders. No Benefit granted
under the Plan shall be enforceable against the Company unless and until the
Plan has been approved by the shareholders of the Company in the manner and to
the extent required by the Code, the Exchange Act and the Code of Laws of South
Carolina, as amended.

 

6.10                           Uncertificated Shares. Each Employee who
exercises an Option to acquire Common Stock or is awarded Restricted Stock may,
but need not, be issued a stock certificate in respect of the Common Stock so
acquired. A “book entry” (i.e., a computerized or manual entry) shall be made in
the records of the Company to evidence the issuance of shares of Common Stock to
an Employee where no certificate is issued in the name of the Employee. Such
Company records, absent manifest error, shall be binding on Employees. In all
instances where the date of issuance of shares may be deemed significant but no
certificate is issued in accordance with this Section 6.10, the date of the book
entry shall be the relevant date for such purposes.

 

6.11                           Other Actions. Nothing contained in the Plan
shall be construed to limit the authority of the Company to exercise its
corporate rights and powers, including, but not by way of limitation, the right
of the Company to grant options for proper corporate purposes other than under
the Plan with respect to any employee or other person, firm, corporation or
association.

 

--------------------------------------------------------------------------------