Exhibit 4.3
COMMONWEALTH
BANKSHARES,
INC*
NON-EMPLOYEE
DIRECTOR
STOCK
COMPENSATION
PLAN
ARTICLE I
DEFINITIONS
1.01 Agreement means a written agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying
the terms and conditions of an Award granted to such Participant.
1.02 Award means an award of Options as provided for hereunder.
1.03 Bank means Bank of the Commonwealth, or its successors.
1.04 Board means the Board of Directors of the Company.
1.05 Code means the Internal Revenue Code of 1986, as amended.
1.06 Common Stock means the common stock of the Company.
1.07 Date of Grant means the date that the Board sets for the grant of
Options to Participants under the Plan.
1.08 Fair Market Value means the average of the five (5) most recent
trades of the Common Stock on the over-the-counter market during the
period, not to exceed thirty (30) calendar days, immediately preceding
an Option's Date of Grant.
1.09 Option means a stock option granted pursuant to Article IV, and that
entities the holder to purchase from the Company a stated number of
shares of Common Stock at the shares' Fair Market Value.
1.10 Participant means a member of the Board who is not an employee of the
Company or the Bank on the applicable Date of Grant.
1.11 Plan means the Commonwealth Bankshares, Inc. Non-Employee Director
Stock Compensation Plan.
1.12 Company means Commonwealth Bankshares, Inc. and its subsidiaries,
or such successors thereto.
ARTICLE II
PURPOSE
The Plan is intended to promote a greater identity of interest between
Participants and the Company's shareholders by increasing the Participants'
proprietary interest in the Company through the receipt of Awards in the form
of Options.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the one or more persons who are employees
of the Company and directors of the Board (the "Employee Directors"), and such
additional employees as the Employee Directors shall appropriately designate,
who shall have complete authority to interpret all provisions of this Plan; to
prescribe the form of Agreements; to adopt, amend, and rescind rules and
regulations pertaining to the administration of the Plan; and to make all other
determinations necessary or advisable for the administration of this Plan. Any
decision made, or action taken, by the Employee Directors in connection with the
administration of this Plan shall be final and conclusive. All expenses of
administering this Plan shall be borne by the Company.
ARTICLE IV
GRANT OF OPTIONS
The Board shall have authority to designate Participants to whom Options are
to be granted and shall specify the number of shares subject to grants. All
Options shall be evidenced by a Memorandum of Option agreement which shall be
subject to the applicable provisions of the Plan and to such other provisions as
the Employee Directors may adopt.
ARTICLE V
STOCK SUBJECT TO OPTIONS
Upon the exercise of any Option, the Company may deliver to the Participant
(or the Participant's broker if the Participant so directs) authorized but
unissued Common Stock. The maximum aggregate number of shares of Common Stock
that may be issued pursuant to the exercise of Options under this Plan is
50,000, subject to adjustment as provided in Article IX. If an Option is
terminated, in whole or in part, for any reason other than its exercise, the
number of shares of Common Stock allocated to the Option or portion thereof may
be reallocated to other Options to be granted under this Plan.
ARTICLE VI
OPTION PRICE
The price per share for Common Stock purchased on the exercise of an Option
shall be the share's Fair Market Value.
ARTICLE VII
EXERCISE OF OPTIONS
7.01 Maximum Option Period. No Option shall be exercisable after the
expiration of ten (10) years from its Date of Grant.
7.02 Nontransferability,. Options granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution.
During the lifetime of the Participant to whom the Option is granted, the
Option may be exercised only by the Participant. No right or interest of a
Participant in any Option shall be liable for, or subject to, any lien,
obligation, or liability of such Participant.
ARTICLE VIII
METHOD OF EXERCISE OF OPTIONS
8.01 Exercisability of Options. Subject to the provisions of Articles VII and
X, an Option becomes exercisable six (6) months after its Date of Grant.
However, an Option granted to a Participant shall be immediately
exercisable if the Participant's membership on the Board terminates as a
result of the Participant's retirement in accordance with Company policy,
death or permanent and total disability (as such term is defined in
Section 22(e)(3) of the Code). An Option shall be forfeited if, as of the
termination of the Participant's membership on the Board, the Option is
not then exercisable and such termination occurs for any reason other than
the Participant's retirement in accordance with Company policy, death or
disability (as defined above). Options that are exercisable or that become
exercisable upon the Participant's termination of membership on the Board
will remain exercisable until the tenth anniversary of the Option's Date
of Grant. An Option may be exercised with respect to any number of whole
shares less than the full number for which the Option could be exercised.
A partial exercise of an Option shall not affect the right to exercise the
Option from time to time in accordance with this Plan and the applicable
Agreement with respect to the shares remaining subject to the Option.
8.02 Payment. Unless otherwise provided by the Agreement, payment of the Option
price shall be made in cash or a cash equivalent acceptable to the Board.
In addition, all or part of the Option price may be paid by surrendering
shares of Common Stock to the Company. If Common Stock is used to pay all
or part of the Option price, the shares surrendered must have a fair
market value (determined as of the day before the date of exercise and
based on the average of the five [5] most recent trades of the Common
Stock on the over-the-counter market during the period, not to exceed
thirty [30] calendar days, preceding such date) that is not less than such
price or part thereof.
8.03 Shareholder Rights. No Participant shall have any rights as a stockholder
with respect to shares subject to his Option until the date of exercise of
such Option.
ARTICLE IX
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number of shares to which Awards may be granted under this Plan
shall be proportionately adjusted, and the terms of outstanding Awards shall be
adjusted, as the Employee Directors shall determine to be equitably required in
the event that the Company (i) effects one or more stock dividends, stock
split-ups, subdivisions or consolidations of shares or (ii) engages in a
transaction to which Section 424 of the Code applies. Any determination made
under this Article IX by the Board shall be final and conclusive.
The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares of obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, outstanding
Awards.
ARTICLE X
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements), and applicable requirements of any exchange or other market
having authority over the trading of the Company's shares.
ARTICLE XI
GENERAL PROVISIONS
12.01 Effect on Service. Neither the adoption of this Plan, its operation,
documents describing or referring to this Plan (or any part thereof)
shall confer on any Participant any right to continue service as a
member of the Board.
12.02 Unfunded Plan. The Plan, insofar as it provides for grants, shall be
unfunded and the Company shall not be required to segregate any assets
that may be represented at any time by grants under this Plan. Any
liability of the Company to any person with respect to any grant under
this Plan shall be based solely upon any contractual obligations that
are created pursuant to this Plan. No such obligation of the Company
shall be deemed to be secured by any pledge of, or other encumbrance
on, any property of the Company.
12.03 Rules of Construction. Headings are given to the articles and sections
of the Plan solely as a convenience to facilitate reference. The
reference to any statute, regulation, or provision of law shall be
construed to refer to any amendment to or successor of such provision
of law.
ARTICLE, XII
AMENDMENT
The Board may amend this Plan from time to time; provided that no amendment
may become effective until shareholder approval is obtained if the amendment (i)
materially increases the aggregate number of shares of Common Stock that may be
issued under the Plan, except in accordance with the provisions of Article IX,
(ii) materially changes the class of individuals eligible to become Participants
or (iii) materially increases the benefits that may accrue to Participants under
the Plan, and provided further that the Board may not amend the Plan more than
once in any six month period unless such amendment is required to comply with
the Code. No amendment shall, without a Participant's consent, adversely affect
any rights of such Participant under any Option outstanding at the time such
amendment is made.
ARTICLE XIII
TERMINATION
The Board may terminate this Plan at any time. This Plan will terminate
automatically, without any action of the Board, if, on any Date of Grant, there
are insufficient shares available for the grant of Awards in accordance with the
terms of the Plan. The termination of this Plan shall not affect any rights of a
Participant under any Option outstanding at the time of such termination.
ARTICLE XIV
DURATION OF PLAN
No Award may be granted under this Plan after five (5) years from the date
of the first grant of an Option under the Plan. Options granted on or before
such date shall remain valid in accordance with their terms.
ARTICLE XV
EFFECTIVE DATE OF PL4N
This Plan is subject to approval by a majority of the votes entitled to be
cast by the Company's shareholders, voting either in person or by proxy, at a
duly held shareholders' meeting. No Awards granted shall be exercisable prior to
approval by the Company's shareholders. However, Awards may be granted prior to
approval of the Plan by shareholders, subject to such approval.
