1
4.6
COUNTRY BANK SHARES CORPORATION
1995 NONQUALIFIED STOCK OPTION AGREEMENT
2
COUNTRY BANK SHARES CORPORATION
1995 NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into this 27th day of
December, 1995, (date of grant) by and between Country Bank Shares
Corporation, a Wisconsin corporation ("Corporation") and, Xxxxx X. Xxxxxxx
("Employee").
W I T N E S S E T H :
WHEREAS, Employee has heretofore been employed by Corporation
or by one of Corporation's Banks; and
WHEREAS, Employee and Corporation wish to set forth in this
Agreement the terms and conditions under which Employee will have
an opportunity to purchase capital stock of Corporation under the
Non-Qualified Stock Option Agreement;
NOW, THEREFORE, the parties hereto do mutually agree as
follows:
1. Purchase of Shares.
A. Purchase. On the date first written above, employee is granted
an option to purchase 1,500 shares of Country Bank Shares Corporation
voting common stock with no par value, upon the terms identified herein.
Employee shall on the date of grant of the nonqualified stock option, be
eligible to purchase twenty percent (20%) of the shares granted under the
nonqualified stock option, at an option price of $41.12, per share. On each
subsequent anniversary of the date of the grant of this option, the employee
shall be permitted to exercise an additional twenty percent (20%) of the
granted shares at an option price of $41.12, per share. Upon the ten (10)
year anniversary of the grant of these options, any shares remaining
unexercised will lapse. The options under this Agreement are nontransferable.
B. Closing. The closing of purchases of Shares pursuant to this
Agreement shall occur at the principal offices of Corporation as identified
under Paragraph 7.
C. Payment of Purchase Price. At closing Employee shall deliver to
Corporation the purchase price for the Shares. Employee shall also be
responsible for payment to Corporation all applicable withholding taxes.
Such taxes shall be delivered to Corporation at Closing by the Employee. At
the election of the Employee, Employee may "cash in" shares with Corporation at
the then existing per share Stipulated Value in an amount necessary to pay
applicable withholding taxes arising as a result of the option exercise.
-2-
3
D. Issuance of Stock Certificate. Corporation shall issue a
certificate for the Shares to Employee. Corporation will not deliver shares of
Common Stock being purchased upon any exercise of this option unless it has
received payment for all applicable withholding taxes or arrangements
satisfactory to Corporation for the payment thereof have been made.
Unless otherwise determined by Corporation, such withholding taxes may be paid
with outstanding shares of Common Stock (including, stock delivered upon
exercise for this option) such stock being valued at the Stipulated Value on
date of exercise. The Employee shall have no rights as a stockholder with
respect to any shares covered by this option until the date of the issuance of
the stock certificate for such shares.
E. Representations and Warranties of Employee. Employee hereby
represents and warrants to Corporation, which warranties and
representations shall be deemed to be made on the date hereof and made again at
the closing of the purchase of shares pursuant to subsection B, above, as
follows:
* Purchase for Investment. Employee is purchasing the shares
hereunder for Employee's own account for investment and not with a view
to, or for resale in connection with, any distribution thereof, and Employee
has such knowledge and experience in financial and business matters that
Employee is capable of evaluating the merits and risks of the investment in the
shares and is able to bear the economic risk of such investment.
F. Status of Shareholder Agreement. Employee acknowledges that
certain shareholders of the Corporation have executed a Shareholder
Agreement which was originally dated January 10, 1990. Employee acknowledges
that any shares which may be issued to him or her pursuant to this 1995
Non-Qualified Stock Option Agreement are not subject to any of the terms,
conditions, rights and restrictions of said January 10, 1990 Shareholder
Agreement or any amendments, revisions or restatements of said Agreement.
G. Legend on Certificates. All certificates representing shares
issued to Employee hereunder shall be endorsed with the following legend:
"The stock represented by this certificate and the disposition thereof
are subject to the terms and conditions set forth in a 1995 Non Qualified Stock
Option Agreement, dated December 27, 1995, a copy of which is on file at the
offices of the issuer in Wisconsin and may be inspected by any person upon
request during normal business hours. No transfer of such securities will be
made on the books of the issuer unless accompanied by evidence of compliance
with the terms of such Agreement."
-3-
4
Likewise Corporation shall place the above endorsement upon any stock
certificate which it may hereafter issue in the name of any person to whom
shares of Corporation's stock subject to this Agreement are transferred.
H. Per Share Stipulated Value. The per share stipulated value
shall be determined pursuant to Section 6 of the Agreement.
I. Termination. The option shall lapse on the ten (10) year
anniversary of this Agreement.
J. Confidentiality. The conditions of this agreement are of
interest only to the Parties hereto, the Parties agree, as a material
provision of this agreement, not to divulge any of the contents hereof to any
other person or entity, except as required by any Court or governmental agency
with the exception of their accountants, attorneys, bankers and in the case of
Corporation, the Board of Directors (who shall be deemed to be bound by this
provision) , and in the case of Employee, their spouse (who shall be deemed to
be bound by this provision). Should Employee disclose any provisions of this
agreement, at the option of Corporation, all benefits under this agreement,
including those unpaid benefits shall lapse to Corporation and no longer be
available to the Employee.
K. Regulatory Restrictions. All transactions authorized or
envisioned by this agreement, shall be subject to necessary regulatory
approvals under applicable federal or state banking or securities laws,
specifically including, but not limited to, restrictions of the purchase by a
bank holding company of its own capital stock, as set forth in the regulations
of the Federal Reserve Board.
2. General Restriction on Sale or Other Disposition of Shares. Employee
shall not, during his lifetime or upon his death, sell, transfer, give, assign,
pledge or otherwise encumber or divest himself of ownership or control of all or
any part of his Shares of Corporation, or other rights under this agreement,
whether voluntarily or by operation of law (such transactions being hereinafter
referred to individually as a "transfer" or collectively as "transfers"),
except in accordance with the terms of this Agreement.
3. Third Party Transfers.
A. Offer to Sell. No shareholder shall sell, assign, pledge,
encumber, hypothecate or otherwise transfer or dispose of all or any
portion of his or her stock in the Corporation subject to this Agreement except
in accordance with and subject to the terms of this Agreement, or upon the
prior written consent of the Corporation and all of its shareholders. If
Employee wishes to
-4-
5
transfer any Shares in Corporation subject to this Agreement, he shall
offer in writing to sell such stock to Corporation. Such offer shall
state the number of shares to be transferred. The offering price of
the Shares shall be the Stipulated Value per share as determined under Section
6, below, and the terms of payment shall be as set forth in Section 7, below.
B. Acceptance of Offer by Corporation. Corporation, must accept
by written notice such offer of sale as to all of the Shares being
offered within thirty (30) days after receipt of written notice of said offer.
Corporation may assign all or any portion of its obligation to accept such
offer to any third party or parties.
C. Rights Upon Sale of All Capital Stock of Corporation.
Notwithstanding anything to the contrary in this Section 3, if all of
the Shareholders of Corporation (other than Employee and any other employee of
Corporation who holds shares of Corporation's capital stock subject to an
agreement substantially similar to this Agreement) sell their common stock in
Corporation in a single transaction or series of related transactions to a
person or persons who are not shareholders of Corporation as of the date hereof
and who, as a result of such sale, become holders of more than fifty-one
percent (51%) of the issued and outstanding common stock of Corporation, and
such person or persons desire to purchase Employee's capital stock, such holder
shall give written notice of such sale or disposition to Employee. Such notice
shall identify the proposed transferee, shall summarize the price, terms of
payment, and other material terms of the proposed disposition. Upon the receipt
of such notice Employee shall sell his Shares of the capital stock of
Corporation to such person or persons on the same terms and conditions and
price per share provided to such other shareholders of Corporation.
D. Sale of Substantially All of the Assets of Corporation.
If all of the shareholders of Corporation (other than Employee and any
other employee of Corporation who holds Shares of Corporation's capital stock
subject to an agreement substantially similar to this Agreement) vote to sell
substantially all of the business assets of Corporation in a single transaction
or a series of related transactions to one (1) or more third party legal
entities, then Employee agrees to abide by such decision and expressly agrees
that he shall be compensated for his Shares upon an orderly dissolution of
Corporation as determined by the majority vote of the shareholders following
such transaction.
4. Mandatory Redemption Upon Termination of Employment.
A. Termination of Employment. Upon the termination of the
employment of Employee with Corporation and with Corporation's Banks
(regardless of the reason for such termination), Corporation shall purchase
from Employee or the personal representative of his
-5-
6
Estate, as the case may be, and each person who has directly or
indirectly received Shares in Corporation subject to this Agreement from
Employee and Employee, such personal representative and all such persons shall
sell to Corporation, all (but not less than all) such Shares owned by them at a
purchase price equal to the Stipulated Value of each such Share as determined
under Section 6, below, as of the date of such termination of employment,
which purchase price shall be payable pursuant to the applicable payment terms
set forth in Section 7, below.
B. Death. Upon the death of Employee, the estate of such deceased
Employee shall sell and Corporation shall purchase all of the Shares of
Corporation owned by such Shareholder at the time of death at the Stipulated
Value per share as provided in Section 6 of this Agreement and upon the terms
and conditions provided in Section 7 of this Agreement.
C. Total Disability of Employee. After the Continuous Total
Permanent Disability of an Employee ("Continuous Total Permanent
Disability" shall have the same meaning as set forth in any then valid contract
of such employment between Employee and Corporation. If Corporation maintains
no such contract at the time of the alleged disability, "Continuous Total
Permanent Disability" should have the meaning of such term or similar term as
defined in the most recently obtained disability insurance policy, if any,
maintained by Corporation that covers Employee at the time of the alleged
disability, provided, however, in the absence of such definition, "Continuous
Total Permanent Disability" shall mean a mental or physical impairment or
illness, which, in the judgment of the Board of Directors of Corporation,
totally and presumably permanently prevents Employee from fully completing
Employee's normal job responsibilities for Corporation) Corporation shall
purchase and the Employee shall sell all of the Shares of Corporation owned by
the disabled Employee at the Stipulated Value as provided in Section 6 of this
Agreement and upon the terms and conditions provided in Section 7 of this
Agreement.
5. Marital Property.
A. Classification of Shares After Death of a Spouse. After the
death of the spouse ("Deceased Spouse") of Employee, either Corporation or
Employee (Employee as the case may be, hereinafter referred to as the "Surviving
Spouse") may request that the personal representative of the Estate of the
Deceased Spouse petition the Court having jurisdiction over the Estate of the
Deceased Spouse for an order under the Wisconsin Statutes determining the
classification of the Shares of Corporation titled in either the surviving
spouse or deceased spouse for purposes of the Wisconsin Marital Property Law.
Upon receipt of the Court's order, such personal representative shall provide
Corporation and the Surviving Spouse with a true and accurate copy thereof, Such
request shall be made by written notice and the personal
-6-
7
representative of the Estate of the Deceased Spouse shall take the
actions requested promptly upon receipt of such notice.
B. Right to Purchase Shares upon Death of a Spouse or Dissolution
of Marriage. If the spouse of Employee dies or the marriage of
Employee is dissolved and, as a result of such death or dissolution, title to
or ownership of any interest in any of Employee's Shares in Corporation is
transferred to or confirmed in any person other than Employee, then Employee
shall have the right and option to purchase from the owner or owners thereof
any or all of such Shares transferred to or confirmed in such other persons
(the "Marital Shares"), and, if Employee exercises such option as hereinafter
provided, such owner or owners shall sell their Marital Shares to Employee at
the Stipulated Value per share as determined pursuant to Section 6, below, and
upon the terms set forth in Section 7, below. Such option shall be
exercisable by written notice from Employee to Corporation and the ex-spouse or
the personal representative of the Estate of the ex-spouse at any time within
an Option Exercise Period of (a) eighteen (18) months after the date of the
spouse's death, or (b) in the event of dissolution of the marriage of Employee,
sixty (60) days after the date of entry of any final order, judgment or decree
determining the rights, if any, of the spouse in the Marital Shares (the
"Dissolution Order"). Notwithstanding the foregoing if, as a result of the
death of the Deceased Spouse, a petition for determination of the
classification of Shares of the Surviving Spouse is filed in a court of
competent jurisdiction before expiration of said eighteen (18) month period
after the death of the spouse, then the Option Exercise Period in the event of
such death shall be extended until six (6) months after a final determination
of such classification. For purposes hereof, a determination of the
classification of the Shares of a Surviving Spouse or a Dissolution Order shall
be considered "final" when made by a court of competent jurisdiction, the time
for appeal of the court's decision has elapsed and no appeal has been taken.
C. Corporation's Right to Purchase Shares. If there are
remaining Marital Shares which are not purchased pursuant to subsection
5.B., above, Corporation shall have the right and option, exercisable by
written notice to the ex-spouse or the personal representative of the Estate of
the Deceased Spouse at any time within thirty (30) days after the expiration of
the period for the exercise by Employee of his option under subsection 5.B.,
above, to purchase any or all of such unaccepted remaining Marital Shares at
the Stipulated Value per share thereof as determined pursuant to Section 6,
below, and upon the terms set forth in Section 7, below, and if Corporation
exercises such option, the owner or owners of such remaining Marital Shares
shall sell such remaining Marital Shares which Corporation has elected to
purchase to Corporation at the price and upon the terms set forth above.
-7-
8
D. Unaccepted Shares. If there continue to be remaining Marital
Shares which are not purchased pursuant to subsections 5.B. or 5.C.,
above, then the transferee or transferees thereof may continue to hold the
shares, subject always to the remaining terms and conditions of this Agreement.
E. Subsequent Events. Employee agrees that if he or she plans
to remarry after the death of his or her spouse or dissolution from his
or her marriage, his or her prospective spouse must sign a counterpart to this
Agreement or, effective upon his or her marriage or remarriage, Corporation
will have a continuing option to buy all the stock owned by him or her
immediately prior to the marriage or remarriage at the price and on the terms
specified in Sections 6 and 7 of this Agreement. Corporation's option
under this section shall continue until exercised or until the execution by the
Employee's spouse of a Counterpart to this Agreement, such new spouse shall be
a "spouse" within the meaning of this Agreement and shall be bound by it as
though an original party.
6. Determination of Per Share Value.
A. Stipulated Value. The "Stipulated Value" per share shall be
calculated annually. The stipulated value shall be the value per share
as fixed by the shareholders at the preceding annual meeting of the Corporation
(the "stock valuation date").
7. Closing and Payment of Redemption or Purchase Price.
A. Time and Place of Closing. The closing of any sale or
redemption pursuant to this Agreement shall occur at the principal
office of Corporation in Wisconsin on such day as Corporation shall select, but
not less than thirty (30) days nor more than ninety (90) days after the
exercise of an option or the occurrence of an event which requires the
redemption, sale or transfer of any of the Shares of Corporation pursuant to
this Agreement. Corporation shall notify Employee or the personal
representative of his Estate (notice to such persons being sufficient notice to
all persons who are required to sell their Shares in Corporation regardless of
whether they have actual or constructive notice or knowledge thereof) in
writing of the exact date and time of closing at least ten (10) days prior to
the date of closing.
B. Transfer of Shares and Payment of Purchase or Redemption Price.
At the closing, the sellers shall deliver to Corporation certificates
evidencing ownership of the Shares subject to the sale or redemption properly
endorsed or with properly executed stock powers and such other instruments or
documents as shall be required by the purchaser in connection with the transfer
of said shares. Effective as of the date of closing, all Shares subject to the
sale or redemption shall be deemed sold or redeemed,
-8-
9
the seller's certificates relating to the Shares shall be deemed
canceled, the rights of the sellers as shareholders of Corporation shall be
deemed terminated and the Secretary of Corporation shall make appropriate
notification of such facts in the stock transfer records of Corporation
regardless of whether such sellers attend or participate in the closing or
whether such certificates are then delivered as aforesaid. The purchase or
redemption price shall be payable over three (3) equal annual installments of
principal and interest. The first payment due at the closing of the transfer of
the shares provided that any outstanding obligation of the Employee pursuant to
this agreement shall be offset against the balance due the sellers at the time
of closing. Interest shall accrue on the unpaid declining balance of principal
at a rate equal to the minimum rate of interest required to be charged to avoid
imputation of unstated interest under Subsection 483 of the Internal Revenue
Code, as amended, and any successor provision thereto as of the date of
closing. The bank shall have the right to prepay the obligations owing in
whole or in part at any time or times prior to maturity without penalty.
8. Notice. Any notice, offer, acceptance or demand required
or permitted to be given under this Agreement shall be sufficient
if made in writing and sent by registered or certified mail to the
address of Employee or any direct or indirect transferees of Shares
from Employee as the same shall appear on the stock transfer book
of Corporation, or the legal residence or place of business of the
personal representative of any employee or, if in the case of
Corporation, the principal office of Corporation.
9. Action of Shareholders, Directors and Officers. In the
event that Corporation shall be required to or shall have the right
to redeem its Shares under this Agreement, Employee or any
shareholder whose Shares are subject to redemption, or the personal
representative of his Estate, shall take any action necessary to
comply with this agreement.
10. Specific Performance. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to
Corporation, any shareholder, Employee or the personal representative of the
Estate of Employee by reason of any failure to perform any of the obligations
under this Agreement. Therefore, if any party hereto (or the heirs, successors
or assigns thereof) shall institute any action or proceeding to enforce the
provisions hereof, any person (including Corporation) against whom such action
or proceeding is brought hereby waives the claims or defense therein that such
party has or may have an adequate remedy at law, and such persons shall not
urge in any such action or proceeding the claim or defense that such remedy at
law exists.
11. Termination of Agreement. This Agreement shall terminate
upon any of the following events:
-9-
10
A. Liquidation or dissolution of Corporation.
B. The mutual written consent to its termination by Corporation and
Employee or by Corporation and all parties owning stock from time to time
subject to this Agreement.
12. Insurance. Corporation is hereby granted the right and authority if
it so desires to purchase a policy or policies of insurance on the
life of Employee in such amount or amounts as the Board of Directors of
Corporation in its sole discretion deems appropriate. In the event that
Corporation chooses to exercise its power, Employee agrees to render all
assistance and cooperation as may be necessary to apply for and acquire such
policies of insurance. All such insurance policies shall be listed on a
schedule to be attached hereto and shall be subject to the terms of this
Agreement.
13. Miscellaneous.
A. Additional Shares of Stock. The provisions of this Agreement
shall apply with respect to any additional shares of stock of
Corporation which Employee shall hereafter or heretofore acquire whether by
purchase, gift, stock dividend, stock split, recapitalization, reorganization
or otherwise.
B. Personal Representatives. For purposes of this Agreement, the
personal representative of the Estate of Employee or a transferee of
Employee shall be that person or persons and/or corporation or corporations
duly appointed by the court exercising jurisdiction over the administration of
such Employee's or transferee's Estate in the state in which he is domiciled at
the time of his death. Any right, duty or obligation which devolves upon or
incurs to the benefit of a personal representative or by the special
administrator of the Estate of the deceased or by a Trustee or other
distributee in possession of stock of Corporation which is includable in said
Estate.
C. Use of Words. The use of words of the masculine gender is
intended to include, wherever appropriate, the feminine or neuter
gender and vice versa. The use of words of the singular is intended to
include, wherever appropriate, the plural and vice versa.
D. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns.
E. No Right to Employment. Nothing in this Agreement shall confer
upon Employee any right to continue in the employ of Corporation or any
subsidiary thereof, or to abridge in any way the right of Corporation to
terminate the employment of Employee at any time.
-10-
11
F. Governing Law. This Agreement and all questions arising in
connection herewith shall be governed by the internal laws of Wisconsin.
G. Compliance With Law. Notwithstanding anything to the contrary
herein contained, no transfer whatsoever may be made except if made in
compliance with all applicable laws, including but not limited to, state and
federal securities laws. Corporation's obligation to transfer shares under this
Agreement shall be subject to its receipt, upon Corporation's request and at
its expense, of an unqualified opinion of its counsel as to compliance with
securities and other applicable laws.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement at Monlello, Wisconsin, on the day, month and year first above
written.
COMPANY:
Attest: COUNTRY BANK SHARES CORPORATION
/s/ Xxxxxx X. Xxxxxxxx, Secretary By: /s/ Xxxx X. Xxxxxxx, President
--------------------------------- ---------------------------
XXXXXX X. XXXXXXXX, SECRETARY XXXX X. XXXXXXX
(SEAL) Employee:
/s/ Xxxxx X. Xxxxxxx
----------------------------
XXXXX X. XXXXXXX
-11-
12
SPOUSAL CONSENT
I acknowledge that I have read the foregoing Agreement and that I
understand its contents. I am aware that by its provisions my spouse agrees to
sell all shares of stock of COUNTRY BANK SHARES CORPORATION held by my spouse
on this date, or hereafter acquired, upon the occurrence of certain events. I
am further aware that included in such sale shall be any interest I have in
any such shares (including without limitation any right or interest by
operation of the Wisconsin Marital Property Laws or by operation of any other
law) and such interest of any of my heirs, legatees or other transferees. I
hereby consent to such sale, approve the provisions of the Agreement, agree to
sell any interest I may have in such shares as required by the Agreement and
agree that those shares and my interest in them are subject to the provisions
of the Agreement. I further covenant and agree that I will take no action at
any time to hinder the operation of the Agreement as to those shares or any
interest which I or my transferees have in them.
Date: 12-27 , 1995. SPOUSE:
-------- /s/ Xxxxxx X. Xxxxxxx
--------------------------
