EXHIBIT 10.10 Stock Option Agreement with X. X. Xxxxx
SWVA BANCSHARES, INC.
STOCK OPTION AGREEMENT
This Agreement constitutes the award of STOCK OPTIONS for a total of
10,000 shares of Common Stock of SWVA Bancshares, Inc. (the "Corporation"), to
X. X. Xxxxx (the "Participant") on such terms and conditions as are set forth
hereinafter.
1. Definitions. As used herein, the following definitions shall
apply.
"Award" means the grant by the Board of the Corporation of a
Stock Option as detailed hereinafter.
"Bank" shall mean Southwest Virginia Savings Bank, FSB, or any
predecessor corporation thereto.
"Board" shall mean the Board of Directors of the Corporation,
or any successor or parent corporation thereto.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the Board or the Stock Option Committee
which may be appointed by the Board from time to time.
"Common Stock" shall mean common stock of the Corporation, or
any successor or parent corporation thereto.
"Corporation" shall mean SWVA Bancshares, Inc., the parent
corporation for the Bank, or any predecessor or Parent thereof.
"Director" shall mean a member of the Board of the
Corporation, or any successor or parent corporation thereto.
"Director Emeritus" shall mean a person serving as a director
emeritus, advisory director, consulting director or other similar position as
may be appointed by the Board of Directors of the Bank or the Corporation from
time to time.
"Disability" means any physical or mental impairment which
renders the Participant incapable of continuing in the employment or service of
the Bank or the Parent in his then current capacity as determined by the
Committee.
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"Date of Grant" shall mean June 29, 1999.
"Employee" shall mean a person employed by the Corporation or
any present or future Parent or Subsidiary of the Corporation.
"Fair Market Value" shall mean: (i) if the Common Stock is
traded otherwise than on a national securities exchange, then the Fair Market
Value per Share shall be equal to the mean between the last bid and ask price of
such Common Stock on such date or, if there is no bid and ask price on said
date, then on the immediately prior business day on which there was a bid and
ask price. If no such bid and ask price is available, then the Fair Market Value
shall be determined by the Committee in good faith; or (ii) if the Common Stock
is listed on a national securities exchange, then the Fair Market Value per
Share shall be not less than the average of the highest and lowest selling price
of such Common Stock on such exchange on such date, or if there were no sales on
said date, then the Fair Market Value shall be not less than the mean between
the last bid and ask price on such date.
"Option" or "Stock Option" shall mean an option to purchase
Shares awarded herein which option is not intended to qualify under Section 422
of the Code.
"Optioned Stock" shall mean Common Stock subject to an Option
granted pursuant to the Agreement.
"Parent" shall mean any present or future corporation which
would be a "parent corporation" as defined in Subsections 424(e) and (g) of the
Code.
"Participant" means X. X. Xxxxx.
"Share" shall mean one share of Common Stock.
"Subsidiary" shall mean any present or future corporation
which would be a "subsidiary corporation" as defined in Subsections 424(f) and
(g) of the Code.
2. Option Price. The Option exercise price for each Share shall be
equal to 100% of the Fair Market Value of the Common Stock on the Date of Grant
as determined by the Board of the Corporation, that being $13.00.
3. Exerciseability of Options.
(a) Schedule of Exercise. This Option shall be immediately
exercisable as of the Date of Grant for a period of not more that five years
thereafter, as noted herein.
(b) Method of Exercise. This Option shall be exercisable
by a written notice which shall:
(i) State the election to exercise the Option, the
number of Shares with respect to which it is being exercised, the
person in whose name the stock certificate or certificates for such
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Shares of Common Stock is to be registered, his address and Social
Security Number (or if more than one, the names, addresses and Social
Security Numbers of such persons);
(ii) Contain such representations and agreements as
to the Participant's investment intent with respect to such shares of
Common Stock as may be satisfactory to the Corporation's counsel;
(iii) Be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any person
or persons other than the Participant, be accompanied by proof,
satisfactory to counsel for the Corporation, of the right of such
person or persons to exercise the Option; and
(iv) Be in writing and delivered in person or by
certified mail to the Treasurer of the Corporation.
Payment of the purchase price of any Shares with respect to which the
Option is being exercised shall be by certified or bank cashier's or teller's
check. The certificate or certificates for shares of Common Stock as to which
the Option shall be exercised shall be registered in the name of the person or
persons exercising the Option.
(c) Restrictions on Exercise. This Option may not be exercised
if the issuance of the Shares upon such exercise would constitute a violation of
any applicable federal or state securities or other law or valid regulation. As
a condition to the Participant's exercise of this Option, the Corporation may
require the person exercising this Option to make any representation and
warranty to the Corporation as may be required by any applicable law or
regulation.
4. Non-transferability of Option. This Option may not be transferred in
any manner otherwise than by will or the laws of descent or distribution and may
be exercised during the lifetime of the Participant only by the Participant. The
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Participant.
5. Recapitalization, Merger, Consolidation, and Similar Transactions.
(a) Adjustment. Subject to any required action by the
stockholders of the Corporation, within the sole discretion of the Committee,
the aggregate number of Shares of Common Stock for which Options may be granted
hereunder, the number of Shares of Common Stock covered by each outstanding
Option, and the exercise price per Share of Common Stock of each such Option,
shall all be proportionately adjusted for any increase or decrease in the number
of issued and outstanding Shares of Common Stock resulting from a subdivision or
consolidation of Shares (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise) or the payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such Shares of Common Stock
effected without the receipt of consideration by the Corporation (other than
Shares held by dissenting stockholders).
(b) Extraordinary Corporate Action. Subject to any required
action by the
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stockholders of the Corporation, in the event of any change in control,
recapitalization, merger, consolidation, exchange of Shares, spin-off,
reorganization, tender offer, partial or complete liquidation or other
extraordinary corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:
(i) appropriately adjust the number of Shares of
Common Stock subject to each Option, the exercise price per Share of Common
Stock, and the consideration to be given or received by the Corporation upon the
exercise of any outstanding Option;
(ii) cancel any or all previously granted Options,
provided that appropriate consideration is paid to the Participant in connection
therewith; and/or
(iii) make such other adjustments in connection with
the Agreement as the Committee, in its sole discretion, deems necessary,
desirable, appropriate or advisable.
7. Related Matters.
(a) Payment. Full payment for each Share of Common Stock
purchased upon the exercise of any Stock Option granted herein shall be made at
the time of exercise of each such Stock Option and shall be paid in cash (in
United States Dollars), Common Stock or a combination of cash and Common Stock.
Common Stock utilized in full or partial payment of the exercise price shall be
valued at its fair market value at the date of exercise. The Corporation shall
accept full or partial payment in Common Stock only to the extent permitted by
applicable law. No Shares of Common Stock shall be issued until full payment
therefor has been received by the Corporation, and no Participant shall have any
of the rights of a stockholder of the Corporation until Shares of Common Stock
are issued to him.
(b) Cashless Exercise. A Participant who has held a Stock
Option for at least six months may engage in the "cashless exercise" of the
Option. In a cashless exercise, a Participant gives the Corporation written
notice of the exercise of the Option together with an order to a registered
broker-dealer or equivalent third party, to sell part or all of the Optioned
Stock and to deliver enough of the proceeds to the Corporation to pay the Option
price and any applicable withholding taxes. If the Participant does not sell the
Optioned Stock through a registered broker-dealer or equivalent third party, he
can give the Corporation written notice of the exercise of the Option and the
third party purchaser of the Optioned Stock shall pay the Option price plus any
applicable withholding taxes to the Corporation.
(c) Transferability. Any Stock Option granted pursuant to the
Agreement shall be exercised during a Participant's lifetime only by the
Participant to whom it was granted and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
(d) Effect of Termination of Service. Upon the termination of
the Participant's service with the Corporation and the Bank as an Employee,
Director or Director Emeritus, the Participant shall nevertheless continue to
exercise such Options for the remaining term of such Options. Such Options of a
deceased Participant may be exercised from the date of his or her death until
the date that such Options would otherwise expire.
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(e) Change in Applicable Law. Notwithstanding any other
provision contained in the Agreement, in the event of a change in any federal or
state law, rule or regulation which would make the exercise of all or part of
any previously granted Stock Option unlawful or subject the Corporation to any
penalty, the Committee may restrict any such exercise without the consent of the
Participant or other holder thereof in order to comply with any such law, rule
or regulation or to avoid any such penalty.
(f) Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to any Option granted under the Agreement unless the
issuance and delivery of such Shares shall comply with all relevant provisions
of law, including, without limitation, the Securities Act of 1933, as amended,
the rules and regulations promulgated thereunder, any applicable state
securities law and the requirements of any stock exchange upon which the Shares
may then be listed.
The inability of the Corporation to obtain from any regulatory body or
authority deemed by the Corporation's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder shall relieve the Corporation of any
liability in respect of the non-issuance or sale of such Shares.
As a condition to the exercise of an Option, the Corporation may
require the person exercising the Option to make such representations and
warranties as may be necessary to assure the availability of an exemption from
the registration requirements of federal or state securities law.
(g) Withholding Tax. The Corporation shall have the right to
deduct from all amounts paid in cash with respect to the cashless exercise of
Options under the Agreement any taxes required by law to be withheld with
respect to such cash payments. Where a Participant or other person is entitled
to receive Shares pursuant to the exercise of an Option pursuant to the
Agreement, the Corporation shall have the right to require the Participant or
such other person to pay the Corporation the amount of any taxes which the
Corporation is required to withhold with respect to such Shares, or, in lieu
thereof, to retain, or to sell without notice, a number of such Shares
sufficient to cover the amount required to be withheld.
(h) Governing Law. The Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia, except to
the extent that federal law shall be deemed to apply.
(i) Administration. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
8. Waiver of Employment Agreement Rights. Upon execution of this
Agreement, the Participant hereby irrevocably agrees to the cancellation and
expiration of the Employment Agreement between the Participant and the Bank,
dated September 17, 1997, and to the irrevocable and immediate waiver of any and
all rights, claims and obligations contained in such Employment Agreement that
the Participant may have as provided for under such Employment Agreement;
provided however, that the previously vested rights of the Participant shall not
be unaffected.
9. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Bank or Parent which
shall acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of the Bank or
Parent.
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10. Amendments. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by both
parties, except as herein otherwise specifically provided.
11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceablitiy of the other provisions hereof.
12. Entire Agreement. This Agreement together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
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