1
EXHIBIT 4.2
COMMUNITY BANCSHARES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Option Agreement") made
and entered into this _______ day of ____________________, 199___ by and
between Community Bancshares, Inc. (the "Company") and
___________________________ ("Director");
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has adopted that
certain 1993 Stock Option Plan, as amended (the "Plan"), a copy of which is
attached hereto as Exhibit "A" and incorporated herein by reference. Pursuant
to the terms of the Plan, Director is entitled to receive, as of the date
hereof, an automatic grant of an option to purchase 2,000 shares of the
Company's authorized $3.00 par value common stock ("Stock"), subject to the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises, agreements
and covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. INCORPORATION OF PLAN PROVISIONS
This Option Agreement is subject to and is to be construed in all
respects in a manner which is consistent with the terms of the Plan, the
provisions of which are hereby incorporated by reference into this Option
Agreement. Unless specifically provided otherwise, all terms used in this
Option Agreement shall have the same meaning as in the Plan.
2. GRANT OF OPTION
Subject to the further terms and conditions of this Option Agreement,
Director is hereby granted a stock option to purchase 2,000 shares of Stock,
effective as of the date first written above.
3. FAIR MARKET VALUE OF STOCK
The Board of Directors has determined, in good faith and in its best
judgment, that the fair market value per share of Stock as of the date this
stock option is granted is $__________.
4. OPTION PRICE
The Board of Directors has determined that the price for each share of
Stock purchased under this Option Agreement shall be $_________.
2
5. EXPIRATION OF OPTIONS
The option to acquire Stock pursuant to this Option Agreement shall
expire (to the extent not previously fully exercised) on __________________
(the fifth anniversary of the date of grant of the option).
6. EXERCISE OF OPTION
Director may exercise this stock option, in whole or in part, from
time to time commencing on the date first above written. The option exercise
price may be paid by Director either in cash, or, in the event that an
organized trading market in the Stock exists on the date of exercise of the
option, by surrender of other shares held by Director of the Stock of the
Company.
For the purposes of this Article 6, an "organized trading market"
shall be deemed to exist on the date of exercise of the option if: (a) the
Stock is listed on a national securities exchange, or (b) the Stock has been
quoted on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") for the 15 trading days preceding the date of exercise of the
option, or (c) bid and asked quotations for the Stock have been published by
the National Quotation Bureau or other recognized inter-dealer quotation
publication (other than NASDAQ) during 20 of the 30 trading days preceding the
date of exercise of the option. In the event that an organized trading market
for the Stock exists on the date of exercise of the option, Director shall be
given credit against the option exercise price hereunder for such shares
surrendered equal to (i) if the Stock is listed on a national securities
exchange or is quoted on the NASDAQ National Market System, the last actual
sales transaction price reported on the day preceding exercise of the option,
or, if there were no actual sales transactions reported for such date, on the
date next preceding such date on which actual sales transactions were reported,
or (ii) if the Stock is quoted on NASDAQ (other than the NASDAQ National Market
System) or by the National Quotation Bureau or other recognized inter-dealer
quotation publication, the average of the high and low price quotations on the
day preceding exercise of the option, or, if there were no price quotations for
such date, on the date next preceding such date on which there were high and
low price quotations for the Stock.
7. MANNER OF EXERCISE
This stock option may be exercised by written notice to the Secretary
of the Company specifying the number of shares to be purchased and signed by
Director or such other person who may be entitled to acquire Stock under this
Option Agreement. If any such notice is signed by a person other than Director,
such person shall also provide such other information and documentation as the
Secretary of the Company may reasonably require to assume that such person is
entitled to acquire Stock under the terms of the Plan and this Option
Agreement. After receipt of the notice and any other assurances requested by
the Company under this Article 7, and upon receipt of the full option price,
the Company shall issue to the person giving notice of exercise under this
Option Agreement the number of shares specified in such notice.
-2-
3
8. RESTRICTIONS ON TRANSFERABILITY
The stock option granted hereunder shall not be transferable by
Director otherwise than by will or by the laws of descent and distribution, and
such stock option shall be exercisable during Director's lifetime only by
Director.
9. FURTHER RESTRICTIONS ON EXERCISE AND SALE OF STOCK
Director acknowledges and understands that the Stock subject to this
Option Agreement is not registered under the Federal Securities Act of 1933, as
amended ("Federal Act") or under the North Carolina Securities Act, as amended
("State Act"). Each option shall be subject to the requirement that if at any
time the Board of Directors shall determine, in its discretion, that the
listing, registration or qualification of the shares subject to such option
upon any securities exchange or under any state or federal law, or the consent
or approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such option or the issue
or purchase of shares thereunder, such option may not be exercised in whole or
in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Board of Directors. The costs of any such listing, registration,
qualification, consent or approval shall be paid by the Company. Alternatively,
the Company shall not permit any exercise of this stock option unless it
receives such representations, factual assurances, and legal opinions as it may
deem necessary to determine and document the availability of an exemption from
registration under both the Federal Act and the State Act with respect to any
particular issuance of shares under this Option Agreement. Further, the Board
of Directors shall require that Stock issued in respect of any exercise of this
stock option shall bear such restrictions on further transfer as shall be
necessary to insure the availability of any exemption so claimed.
10. REORGANIZATION
In the event that dividends are payable in Common Stock of the Company
or in the event there are splits, subdivisions or combinations of shares of
Common Stock of the Company, the number of Shares deliverable upon the exercise
thereafter of this Option shall be increased or decreased proportionately, as
the case may be, without change in the aggregate purchase price.
In case the Company is merged or consolidated with another corporation
and the Company is not the surviving corporation, or in case the property or
stock of the Company is acquired by another corporation, or in case of a
separation, reorganization, recapitalization or liquidation of the Company, the
Board of Directors of the Company, or the Board of Directors of any corporation
assuming the obligations of the Company hereunder, shall either (i) make
appropriate provision for the protection of any outstanding Options by the
substitution on an equitable basis of appropriate stock of the Company, or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to the shares of Common Stock of the Company, provided only
that the excess of the aggregate fair market value of the shares subject to
option immediately after such substitution over the purchase price thereof is
not more than the excess of the aggregate fair market
-3-
4
value of the shares subject to option immediately before such substitution over
the purchase price thereof, or (ii) upon written notice to the Optionee provide
that the Option (including the shares not then exercisable) must be exercised
within sixty (60) days of the date of such notice or it will be terminated.
IN WITNESS WHEREOF, the Company has caused this Option Agreement to be
executed by a member of the Board of Directors or a duly authorized officer of
the Company, and Director has executed this Option Agreement as of the date
first written above.
COMMUNITY BANCSHARES, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxxxxx, President
Attest:
---------------------------------
Xxxxx X. Xxxxx, Secretary
"DIRECTOR"
---------------------------------
-4-
