EXHIBIT 10.3
COMMUNITY BANKS, INC.
DIRECTORS STOCK OPTION
STOCK OPTION AGREEMENT
TO: ___________________________
Name
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Social Security Number
DATE: ________________________
You are hereby granted a non-qualified stock option effective as of the
date hereof, to purchase ____________ shares of Common Stock of Community Banks,
Inc. ("CBI") at a price of ______ per share, pursuant to the 2000 Community
Banks, Inc. Directors Stock Option Plan (the "Plan").
TIME OF EXERCISE OF OPTION
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A. Your option may be exercised upon the first to occur of (i) one year
after the date of this agreement, and (ii) a Change in Control of CBI, as
defined in the Plan.
B. During your lifetime, this option shall be exercisable by only you and
only while you are a director of CBI or one of its subsidiaries or within three
(3) years after you cease serving as a director.
C. If you die while this option is exercisable, this option may be
exercised within three (3) months of your date of death by those entitled under
your will or the laws of descent and distribution, but only if and to the extent
the option was exercisable by you immediately prior to your death.
D. If you are removed as a director for any of the reasons specified in
Section 1726(b) of the Pennsylvania Business Corporation Law of 1988, this
option shall be forfeited and rendered unexercisable.
E. Notwithstanding anything to the contrary in this Agreement, the option
shall not be exercised after and shall expire ten (10) years from the date of
this Agreement.
METHOD OF EXERCISE
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You may exercise your option by giving written notice to the Secretary of
CBI on forms supplied by CBI at its then principal executive office, accompanied
by payment of the option price for the total number of shares you specify that
you wish to purchase. The payment may be in any of the following forms: (i)
cash, which may be evidenced by a check (provided, that any optionee whose
employment has terminated and the estate of any deceased optionee must make
payment by certified or cashier's check); (ii) certificates representing shares
of CBI Common Stock which will be valued by the Secretary of CBI at the fair
market value on the date of exercise, accompanied by an assignment of the stock
to CBI; or (iii) any combination thereof. Any assignment of stock shall be in a
form and substance satisfactory to the Secretary of CBI, including guarantees of
signature(s) where he/she deems such guarantees necessary or desirable.
ADJUSTMENT
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In the event of any change in the outstanding shares of CBI Common Stock by
reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion, or what the Compensation Committee deems in its sole discretion to
be similar circumstances, the number and kind of shares subject to this option
and the option price for such shares shall be appropriately adjusted in a manner
to be determined in the sole discretion of the Compensation Committee.
TRANSFERABILITY / RIGHTS PRIOR TO EXERCISE
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This option is not transferable, except in the event of death as provided
above. During your lifetime, this option is exercisable only by you. Until the
option price has been paid in full pursuant to due exercise of this option and
the purchased shares are delivered to you, you do not have any rights as a
stockholder of CBI. CBI reserves the right not to deliver to you the shares
purchased by virtue of the exercise of this option during any period of time in
which CBI deems, in its sole discretion, that such delivery may not be
consummated without violating a federal, state, local, or securities exchange
rule, regulation, or law.
OTHER RESTRICTIONS
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Notwithstanding anything to the contrary contained herein, this option is
not exercisable until all the following events occur and during the following
periods of time:
(1) Until the Plan pursuant to which this option is granted is
approved by the stockholders of CBI;
(2) Until this option and the optioned shares are approved and/or
registered with such federal, state, and local regulatory bodies
or agencies and securities exchanges as CBI may deem necessary or
desirable;
(3) During any period of time in which CBI deems that the
exercisability of this option, the offer to sell the shares
optioned hereunder, or the sale thereof, may violate a federal,
state, local, or securities exchange rule, regulation or law, or
may cause CBI to be legally obligated to issue or sell more
shares than CBI is legally entitled to issue or sell.
CONFLICTING TERMS
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This option shall be subject to the terms of the Plan in effect on the date
this option is granted, which terms are hereby incorporated herein by reference
and made a part hereof. In the event of any conflict between the terms of this
option and the terms of the Plan in effect on the date of this option, the terms
of the Plan shall govern. This option constitutes the entire understanding
between CBI and you with respect to the subject matter hereof and no amendment,
supplement, or waiver of this option, in whole or in part, shall be binding upon
CBI unless in writing and signed by the President and Chief Executive Officer of
CBI This option and the performances of the parties hereunder shall be construed
in accordance with and governed by the laws of the Commonwealth of Pennsylvania
applicable to contracts made and to be performed solely in the Commonwealth of
Pennsylvania.
ATTEST: COMMUNITY BANKS, INC.
By:
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I hereby acknowledge receipt of a copy of the foregoing Stock Option and, having
read it, hereby signify my understanding of and my agreement with its terms and
conditions.
________________________________________ ________________________________
Witness (Signature)
______________________
(Date)
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