Exhibit 3
STOCK OPTION AGREEMENT
THIS AGREEMENT, Made this 28/th/ day of June, 1995 by and between HERITAGE
BANKSHARES, INC., a Virginia bank holding company (hereinafter referred to as
"Company") and XXXXXX X. XXXXX, (hereinafter referred to as "Xxxxx").
WHEREAS, The Board of Directors adopted a Stock Option Plan on the 3/rd/ day of
June, 1987.
WHEREAS, the Stock Option Plan was to become effective after it had been
approved by a vote of a majority of the outstanding shares of the Company; and
WHEREAS, at the Annual Stockholders Meeting held on the 14/th/ day of July,
1987, the requisite majority of outstanding shares approved the Stock Option
Plan; and
WHEREAS, the Committee appointed by the Chairman in accordance with the
provision of said Plan wishes to effectuate said Stock Option Plan and to grant
option to purchase the stock of the Company under the terms and conditions as
hereinafter set forth, and said grant was approved by the Board of Directors at
its meeting on June 28, 1995.
NOW, THEREFORE, that for and in consideration of the premises and other good and
valuable considerations, the parties hereto do covenant and agree as follows:
1. The Company does hereby grant unto Xxxxx, 10,000 options (one option
equaling one share of stock) to purchase 10,000 shares of common stock
of Heritage Bankshares, Inc., at an option price of $8.50 per share on
the following terms and conditions:
(a) 2,500 options shall have accrued and be exercisable as of
September 1, 1996. The remaining 7,500 options shall accrue to
Xxxxx at the rate of 25 percent per year of the total grant, or
2,500 options per year of service, (the first said year to
commence on the 1/st/ day of September, 1996,) and shall continue
to accrue each year thereafter until the full amount of the grant
has been exhausted. Xxxxx shall have the right to exercise the
options in accordance with Section 10 of the Stock Option Plan as
soon as they accrue.
(b) The options granted hereunder shall be exercised within a yen year
period, commencing September 1, 1996, unless otherwise extended by
the Board of Directors. In the event that the options are not
exercised then they shall lapse at the end of the said ten year
period or sooner as hereinafter provided.
(c) The options are granted upon the condition that Xxxxx remains in
the employment of the Company and in good standing.
(d) In the event that Xxxxx resigns or is discharged from the
employment of the Company, the Xxxxx shall be entitled to only the
options which have accrued over the period of each full year up to
the date of Xxxxx'x resignation or discharge but in no event shall
fractional shares be granted. Further, in case of the above, the
remaining unaccrued options shall lapse and be of no force and
effect.
(e) The options granted hereunder shall fully accrue and be
exercisable upon the occurrence of any of the following events:
(1) any merger or consolidation of the Company with or into
any other corporation;
(2) any share exchange in which a corporation, person or
entity acquires the issued or outstanding shares of
capital stock of the Company;
(3) any issuance of shares of the Company that results in the
acquisition of control of the Company by any person, firm
or corporation or group of one or more thereof that
previously did not control the Company; or
(4) any sale, lease, exchange, mortgage, pledge or other
transfer in one transaction or a series of transactions,
of all, or substantially all, of the assets of the Company
to any other corporation, person, entity.
(f) The Board of Directors have approved said grant of options as
contained herein at its meeting on June 28, 1995.
2. The options granted hereunder shall be exercised by a written notice
which shall state:
(a) the election to exercise the option; the number of shares in
respect of which it is being exercised; the person in whose name
the stock certificate or stock certificates have such shares of
common stock is to be registered; his and her address and social
security number.
(b) be signed by the person entitled to exercise the option.
(c) be in writing and delivered in person or by certified mail to the
Chairman or Secretary of the Board.
3. The options granted hereunder may not be transferred in any manner
otherwise than by Will or by the laws of descent and distribution (to
anyone other than the Optionee's spouse or executor)
The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
Date of Grant: June 28, 1995.
/s/ Xxxxx X. Xxxxxxxx, Xx.
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Xxxxx X. Xxxxxxxx, Xx.
Chairman of the Board
