Document:

Amendment to Nonstatutory Stock Option Plan

 EXHIBIT 10.05 
  
 BANK OF WILMINGTON 
  
 AMENDMENT NO. 1 TO 
 1999 NONSTATUTORY
STOCK OPTION PLAN 
  
 THIS AMENDMENT NO. 1 TO THE 1999
NONSTATUTORY STOCK OPTION PLAN (the “Amendment”) is made as of this 17th day of June, 2005, by Bank of Wilmington (the “Bank”). 
  
 WHEREAS, the Bank’s Board of Directors heretofore adopted the Bank’s 1999 Nonstatutory Stock Option Plan (the “Director Plan”)
which provides for the grant of options to directors of the Bank to purchase newly issued shares of the Bank’s common stock; and, the Director Plan previously has been approved by the Bank’s shareholders and by the North Carolina
Commissioner of Banks (the “Commissioner”) in the manner required by North Carolina law; and, 
  
 WHEREAS, under North Carolina law applicable to banks, the Director Plan may provide for the issuance of an aggregate number of shares upon the
exercise of options granted thereunder equal to not more than 10% of the Bank’s total outstanding shares, and Section 3 of the Director Plan, as originally adopted, provides for the issuance of up to an aggregate of 107,068 shares of
common stock (as adjusted for the five-for-four split in the Bank’s common stock effected during June 2001); and, 
  
 WHEREAS, by resolutions on February 17, 2005, and as a result of increases in the number of outstanding shares of the Bank’s common stock
since the Director Plan was first adopted, the Bank’s Board of Directors, based on the recommendation of its Corporate Governance Committee, approved an amendment to the Director Plan, subject to approval by the Commissioner and the Bank’s
shareholders, to increase the aggregate number of shares that may be issued under the Plan during its life to 163,979 shares, and the Board of Directors authorized the submission of the proposed amendment for approval by the Bank’s shareholders
and by the Commissioner; and, 
  
 WHEREAS, at the Annual
Meeting of the Bank’s shareholders held on May 5, 2005, which was adjourned to May 25, 2005, and by the affirmative vote of more than two-thirds of the Bank’s then outstanding shares, the Bank’s shareholders approved the
proposed amendment, subject to approval of the proposed amendment by the North Carolina Commissioner of Banks; and, 
  
 WHEREAS, by letter dated June 15, 2005, the Commissioner approved the proposed amendment; and, 
  
 WHEREAS, pursuant to the above authority, this Amendment No. 1 is
made for the purpose of effecting the amendment to the Director Plan previously approved by the Bank’s Board of Directors and shareholders and by the Commissioner. 
  
 NOW THEREFORE, in consideration of the premises and pursuant to authority duly given by the Bank’s Board of
Directors, the Bank’s shareholders and the Commissioner, Section 3 of the Director Plan hereby is amended to increase the aggregate number of shares that may be issued during the life of the Director Plan upon the exercise of options
granted thereunder to 163,979 shares. 

 IN WITNESS WHEREOF, the Bank has executed this Amendment, by and through the undersigned thereunto
duly authorized, on this the day and year first above written. 
  

					
	 	 	BANK OF WILMINGTON
			
	 (SEAL)
	 	 	 	 
			
	 	 	By:	 	 /s/ Cameron Coburn

	 	 	 	 	Cameron Coburn
	 	 	 	 	President and Chief Executive Officer

  

	
	ATTEST:
	
	/s/ Michelle Southerland
	 Michelle Southerland

	 Corporate Secretary

  

 2Form of Nonstatutory Stock Option Agreement

 EXHIBIT 10.06 
  
 STATE OF NORTH CAROLINA 
 COUNTY OF
NEW HANOVER 
  
 NONSTATUTORY STOCK OPTION AGREEMENT

  
 THIS NONSTATUTORY STOCK OPTION AGREEMENT (the
“Agreement”) is made and entered into as of this      day of                     ,
20    , between BANK OF WILMINGTON, a North Carolina banking corporation (the “Bank”), and
                                       
 (the “Optionee”). 
  
 WHEREAS, the Board
of Directors of the Bank (the “Board”) previously adopted Bank of Wilmington 1999 Nonstatutory Stock Option Plan (the “Plan”) subject to approval by the Bank’s shareholders and the North Carolina Commissioner of Banks; and

  
 WHEREAS, the shareholders of the Bank, at an annual
meeting duly called and held on April 29, 1999, approved the Plan (the “Effective Date”), and the North Carolina Commissioner of Banks has approved the Plan; and 
  
 WHEREAS, the shareholders of the Bank, at the Bank’s annual meeting held on May 5, 2005, approved an
amendment to the Plan, and the North Carolina Commissioner of Banks approved that amendment on June 15, 2005; and 
  
 WHEREAS, the Plan provides that the Board may, from time to time, grant to Directors (as defined in the Plan) of the Bank the right to purchase
shares of the Bank’s common stock (“Common Stock”); and 
  
 WHEREAS, the Board has approved the grant of an option under the Plan to the Optionee, and the Bank and the Optionee desire to enter into this Agreement to set forth the terms and conditions of that option. 
  
 NOW, THEREFORE, the Bank and the Optionee agree as follows:

  
 1. Date of Grant of Option. The date of grant of the
option granted under this Agreement is     ,                     , 20     (the
“Date of Grant”) 
  
 2. Grant of Option. The
Bank hereby grants to the Optionee the right (the “Option”) to purchase from the Bank all or any portion of an aggregate of
                                       
  (            ) shares of Common Stock (“Option Shares”) which shall be authorized but unissued shares. The Option is granted pursuant to the Plan, the
terms and conditions of which are incorporated into this Agreement by reference. 
  
 3. Option Price. The price to be paid for the Option Shares shall be
                                         AND
            /00 DOLLARS ($            ) per share (the “Option Price”) which is the fair market
value of the Option Shares as determined by the Board as of the Date of Grant. 
  
 4. Period within which Option may be Exercised. Subject to any further restrictions in this Agreement, the Optionee shall have the right to exercise the Option to purchase the 

 Option Shares at any time after     ,
                    , 20    , provided that the Optionee shall have completed six months of continuous full-time
service as a director of the Bank following the Date of Grant, and the Optionee, in his or her discretion, may exercise all or any portion of the Option. The Option shall terminate as provided in Paragraph 7 hereof. 
  
 5. Change in Control. When used herein, the phrase “change in
control” refers to (i) the acquisition by any person, group of persons or entity of the beneficial ownership or power to vote more than twenty-five (25%) percent of the Bank’s outstanding stock, (ii) during any period of two
consecutive years, a change in the majority of the Board unless the election of each new Director was approved by at least two-thirds of the Directors then still in office who were Directors at the beginning of such two-year period, or (iii) a
reorganization, merger, or consolidation of the Bank with one or more other entities in which the Bank is not the surviving entity, or the transfer of all or substantially all of the assets or shares of the Bank to another person or entity.
Notwithstanding anything contained in this Agreement or the Plan to the contrary, the term “change in control” shall not include a transaction approved by the Bank’s Board of Directors which results in the Bank merging with,
transferring its assets to or becoming the subsidiary of, a corporation or entity newly formed at the direction of the Bank’s Board of Directors for the purpose of such transaction (including a corporation or entity so formed for the purpose of
serving as the Bank’s parent bank holding company), and in connection with which transaction the Bank’s former shareholders (other than those who exercise statutory rights of dissent and appraisal) become the holders of substantially all
of the voting stock of such corporation. Further, a transaction or event shall not be considered a “change in control” if, prior to the consummation or occurrence of such transaction or event, the Bank and Optionee agree in writing that
the same shall not be treated as a “change in control” for purposes of this Agreement. 
  
 6. Method of Exercise. The Option shall be exercised by written notice to the Board, signed by the Optionee or by such other person as may be
entitled to exercise the Option, substantially in the form of Exhibit A to this Agreement. The written notice shall state the number of shares with respect to which the Option is being exercised and shall either be accompanied by payment of the
aggregate Option Price for such shares or shall fix a date (not more than ten business days from the date of such notice) by which the payment of the aggregate Option Price will be made. Payment of the aggregate Option Price for the shares
being purchased may only be paid in cash or by a certified or cashiers’ check. The Optionee may not exercise the Option to purchase less than 100 shares, unless the Committee otherwise approves or unless the partial exercise is for the
remaining shares available under the Option. A certificate or certificates for the shares of Common Stock purchased upon the exercise of the Option shall be issued in the regular course of business subsequent to the exercise of the Option and the
payment therefor. Until certificates representing shares purchased upon the proper exercise of the Option have been issued and registered on the Bank’s shareholder records, no person entitled to exercise the Option granted under this Agreement
shall have any of the rights or privileges of a shareholder with respect to any shares of Common Stock issuable upon exercise of the Option, 
  
 7. Termination of Option. The Option shall terminate as described below. 
  
 (a) Except as provided in subparagraphs (b), (c), (d) and (e) below, the Option, to the extent that it has
not previously expired or been exercised, shall terminate on the earlier of (i) the date the Optionee leaves the Board for any reason other than the Optionee’s retirement, disability, death, or as a result of a change in control of the
Bank or (ii) the date which is ten years after the Date of Grant. 
  
 (b) In the event the Optionee retires prior to the date which is ten years after the Date of Grant, the Optionee shall have the right to exercise the Option, to the extent it has not previously expired or been
exercised, for the remainder of such ten-year period, and, to the extent not so 
  

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 exercised during that period, it shall terminate and be of no further force or effect. For purposes of this Agreement,
the term “retirement” shall mean any termination of an Optionee’s membership on the Board (i) at any time after attaining age 62 with the approval of the Board, or (ii) at the election of the Optionee, at any time after
not less than five years service as a member of the Board, computed on a cumulative basis. 
  
 (c) In the event the Optionee leaves the Board by reason of such Optionee’s disability prior to the date which is ten years after the Date of Grant, the Optionee shall have the right to exercise the Option,
to the extent it has not previously expired or been exercised, for the remainder of such ten-year period, and, to the extent not so exercised during that period, it shall terminate and be of no further force or effect. For purposes of the Plan, the
term “disability” shall be defined as may be determined by the Board, from time to time, generally or with respect to any individual Optionee. 
  
 (d) In the event the Optionee dies while serving on the Board or after his or her retirement or after his or her leaving by reason of disability or
following a change in control, and prior to the date which is ten years after the Date of Grant, the Option, to the extent it has not previously expired or been exercised, shall be exercisable, according to its terms, by the personal
representative, the executor or the administrator of the Optionee’s estate, or the person or persons who acquired the Option by bequest or inheritance from the Optionee, at any time within 12 months after the date of death of the Optionee, but
in no event may the Option be exercised later than the earlier of the date which is 12 months following the date of the Optionee’s death or the date which is ten years after the Date of Grant, and, to the extent not so exercised during
that period, it shall terminate and be of no further force or effect. 
  
 (e) In the event the Optionee leaves the Board as a result of a change in control of the Bank prior to the date which is ten years after the Date of Grant, then, subject to Paragraph 10(b), the Optionee shall have the right to
exercise the Option, to the extent that it has not previously expired or been exercised, for the remainder of such ten-year period, and, to the extent not so exercised during that period, it shall terminate and be of no further force or effect.

  
 8. Effect of Agreement on Status of Optionee. Neither
the grant of the Option nor anything contained in this Agreement or the Plan shall be interpreted as giving the Optionee any right to continued service as a Director of the Bank or to limit or restrict the Bank’s right at any time to remove the
Optionee from service as a Director or to withhold any renomination of the Optionee for election as a Director. 
  
 9. Listing and Registration of Option Shares. The Bank’s obligation to issue shares of Common Stock upon exercise of the Option is expressly
conditioned upon (i) the completion by the Bank of any registration or other qualification of such shares under any state or federal law or regulations or rulings of any governmental regulatory body, or (ii) the making of such investment
representations or other representations and agreements by the Optionee or any person entitled to exercise the Option in order to comply with the requirements of any exemption from any such registration or other qualification of the Option Shares
which the Board shall, in its discretion, deem necessary or advisable. Notwithstanding the foregoing, the Bank shall be under no obligation to register or qualify the Option Shares under any state or federal law. The required representations and
agreements referenced above may include representations and agreements that the Optionee, or any other person entitled to exercise the Option, (i) is purchasing such shares on his or her own behalf as an investment and not with a present
intention of distribution or re-sale and (ii) agrees to have placed upon any certificates representing the Option Shares a legend setting forth any representations and agreements which have been given to the Board or a reference thereto and
stating that such shares may not be transferred except in accordance with all applicable state and federal securities laws, and regulations, and further representing that, prior to 
  

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 making any sale or other disposition of the Option Shares, the Optionee, or any other person entitled to exercise the
Option, will give the Bank notice of the intention to sell or dispose of such shares not less than five days prior to such sale or disposition. 
  
 10. Adjustment Upon Changes in Capitalization; Dissolution or Liquidation. 
  
 (a) Changes in Capitalization; Stock Splits and Dividends. In the event of (i) any dividend payable by the Bank
in shares of its Common Stock, or (ii) any recapitalization, reclassification, split-up, consolidation or combination of, or other change in or offering of rights to the holders of, the Bank’s Common Stock, or (iii) an exchange of the
outstanding shares of the Bank’s Common Stock for a different number or class of shares of stock or other securities of the Bank in connection with a merger, consolidation or other reorganization of or involving the Bank (provided the Bank
shall be the surviving or resulting corporation in any such merger or consolidation), then, to the extent that it, in its discretion, shall determine an adjustment to be appropriate in order to reflect such event or transaction, and in such manner
as it shall determine to be appropriate, the Board shall adjust the number and class or kind of shares which may be issued upon exercise of the Option and/or the Option Price, all computed on a basis prior to such event. However, in no event shall
any such adjustment change the aggregate Option Price for Option Shares to be purchased upon the exercise of the Option. 
  
 Any such adjustments made by the Board shall be consistent with changes in the Bank’s outstanding Common Stock resulting from the above events and,
when made, shall be final, conclusive and binding on all persons, including, without limitation, the Bank, the Optionee or other person having any interest in the Option. Any fractional shares resulting from any such adjustment shall be eliminated.

  
 (b) Dissolution; Merger or Consolidation; Sale of
Assets. In the event of (i) a dissolution or liquidation of the Bank, (ii) the sale of substantially all the Bank’s assets, or (iii) a merger or consolidation of the Bank with or into any other corporation or entity, or a
statutory share exchange in which the Bank’s outstanding shares are acquired by any other corporation in exchange for its shares (or any other such reorganization or similar transaction), in which the Bank is not the surviving or resulting
corporation, and if a provision is not made in such transaction for the continuance of the Plan or the assumption of the Option by any successor to the Bank or for the substitution for the Option of new options covering shares of any other or
successor corporation or a parent or subsidiary thereof, then, in such event, and to the extent the Option has not previously expired or been exercised, all rights of the Optionee pursuant to the Option shall terminate and be of no further effect
immediately prior to the effective time of such dissolution, liquidation, sale, merger, consolidation, share exchange or other reorganization (or at such other time and pursuant to such rules and regulations as the Board shall determine and
promulgate to the Optionee). However, to the extent the Option has not previously expired or been exercised, and notwithstanding any provisions of the Plan or this Agreement to the contrary, the Option will become exercisable, and may be exercised,
in full immediately prior to the effective time of any such event. 
  
 (c) Miscellaneous. The grant of the Option under this Agreement shall not affect in any way the right or power of the Bank or its shareholders to make or authorize any adjustment, recapitalization, reorganization, or other change in
the Bank’s capital structure or its business, or any merger or consolidation of the Bank, or to issue bonds, debentures, preferred or other preference stock ahead of or affecting Common Stock or the rights thereof, or the dissolution or
liquidation of the Bank, or any sale or transfer of all or any part of the Bank’s assets or business. 
  
 11. Non-Transferability. The Option granted under this Agreement shall not be assignable or transferable except, in the event of the death of the
Optionee, by will or by the laws of 
  

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 descent and distribution. In the event of the death of the Optionee, the personal representative, the executor or the
administrator of the Optionee’s estate, or the person or persons who acquired by bequest or inheritance the right to exercise the Option, may exercise the unexercised Option or portion thereof, in accordance with the terms hereof, prior to the
date which is ten years after the Date of Grant. 
  
 12.
Tax Withholding. The grant of the Option and Option Shares delivered pursuant to this Agreement, and any amounts distributed with respect thereto, may be subject to applicable federal, state and local withholding for taxes. The Optionee
expressly acknowledges and agrees to such withholding, where applicable, without regard to whether the Option Shares may then be sold or otherwise transferred by the Optionee. 
  
 13. Notices. Any notices or other communications required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been sufficiently given if delivered personally or when deposited in the United States mail as Certified Mail, return receipt requested, properly addressed and postage prepaid, if to the Bank, at its principal
office at 1117 Military Cutoff Road, Wilmington, North Carolina 28405; and, if to the Optionee, at his or her last address appearing on the books of the Bank. The Bank and the Optionee may change their address or addresses by giving written
notice of such change as provided herein. Any notice or other communication hereunder shall be deemed to have been given on the date actually delivered or as of the third business day following the date mailed, as the case may be. 

 
 14. Construction Controlled by Plan. This Agreement shall be
construed so as to be consistent with the Plan, and the provisions of the Plan shall be deemed to be controlling in the event that any provision hereof should appear to be inconsistent therewith. The Optionee hereby acknowledges receipt of a copy of
the Plan from the Bank. 
  
 15. Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner as to be valid and enforceable under applicable law, but if any provision of this Agreement is determined to be unenforceable, invalid or illegal, the validity of any
other provision or part thereof shall not be affected thereby and this Agreement shall continue to be binding on the parties hereto as if such unenforceable, invalid or illegal provision or part thereof had not been included herein. 
  
 16. Modification of Agreement; Waiver. This Agreement may be modified,
amended, suspended or terminated, and any terms, representations or conditions may be waived, but only by a written instrument signed by each of the parties hereto. No waiver hereunder shall constitute a waiver with respect to any subsequent
occurrence or other transaction hereunder or of any other provision hereof. 
  
 17. Captions and Hearings; Gender and Number. Captions and paragraph headings used herein are for convenience only, do not modify or affect the meaning of any provision herein, are not a part hereof, and shall
not serve as a basis for interpretation or in construction of this Agreement. As used herein, the masculine gender shall include the feminine and neuter, the singular number the plural, and vice versa, whenever such meanings are appropriate.

  
 18. Governing Law; Venue and Jurisdiction. Without
regard to the principles of conflicts of laws, the laws of the State of North Carolina shall govern and control the validity, interpretation, performance, and enforcement of this Agreement. The parties hereto agree that any suit or action relating
to this Agreement shall be instituted and prosecuted in the courts of the County of New Hanover, State of North Carolina, and each party hereby does waive any right or defense relating to such jurisdiction and venue. 
  

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 19. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the
Bank, its successors and assigns, and shall be binding upon and inure to the benefit of the Optionee, his heirs, legatees, personal representatives, executors, and administrators. 
  
 20. Entire Agreement. This Agreement constitutes and embodies the entire understanding and agreement of the parties
hereto and, except as otherwise provided hereunder, there are no other agreements or understandings, written or oral, in effect between the parties hereto relating to the matters addressed herein. 
  
 21. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed an original, but all of which taken together shall constitute but one and the same instrument. 
  
 IN WITNESS WHEREOF, the Bank has caused this instrument to be executed in its corporate name by its undersigned
authorized officer, and attested by its Secretary or one of its Assistant Secretaries, and its corporate seal to be hereto affixed, all by authority of its Board of Directors first duly given, and the Optionee has hereunto set his or her hand and
adopted as his or her seal the typewritten word “SEAL” appearing beside his or her name, all done this the day and year first above written. 
  

			
	BANK OF WILMINGTON
		
	 By:
	 	  

  

			
	ATTEST:	 	 
	
	  

	  

	 	, Corporate Secretary
		
	[CORPORATE SEAL]	 	 

  

	
	OPTIONEE
	
	  

	[Optionee Name]

  

 6 

 EXHIBIT A TO 
 NONSTATUTORY STOCK OPTION AGREEMENT 
  
 NOTICE OF EXERCISE 
 OF 
 NONSTATUTORY STOCK OPTION 
  

	To:	The Board of Directors of Bank of Wilmington 

  
 The undersigned hereby elects to purchase
                     whole shares of Common Stock of Bank of Wilmington (the “Bank”) pursuant to the Nonstatutory Stock Option
granted to the undersigned in that certain Nonstatutory Stock Option Agreement between the Bank and the undersigned dated as of July     , 2005. The aggregate purchase price for such shares is
$            , which amount is (i) being tendered herewith, (ii) will be tendered on or before
                    , 2      , (cross out provision which does not apply) in cash. The effective date of
this election shall be                     , 2      , or the date of receipt of this Notice by the Bank
if later. 
  
 Executed this      day of
                    , 2      , at
                    . 
  

	
	  

	Optionee
	
	  

	(Social Security Number)

  

 7

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