1
OPTION NUMBER D -- ___ _______ SHARES
SECURITY BANCORP, INC.
DIRECTOR OPTION TO PURCHASE
SHARES OF COMMON STOCK
This certifies that, for value received, _______________ (the
"Holder") is entitled, subject to the terms and conditions hereinafter set
forth, at any time and from time to time after the date set forth hereinbelow
and before 5:00 P.M., Canton, Georgia, time, ________________ (such date being
ten years from the date of this Option, and being hereinafter referred to as
the "Exercise Termination Date"), but not thereafter, to purchase _______
shares of the Common Stock, $1.00 par value per share (the "Shares"), of
Security Bancorp, Inc. (the "Company").
The purchase price payable upon exercise of this Option shall
be $_______ per Share (the "Option Price") which is subject to adjustment upon
the occurrence of the contingencies set forth in this Option.
Upon delivery of this Option with the subscription form
attached hereto, duly executed, together with payment of the Option Price for
the Shares thereby purchased, at the principal office of the Company, or at
such other address as the Company may designate by notice in writing to the
Holder, the Holder shall be entitled to receive, and the Company shall, within
a reasonable time (not to exceed ten business days after this Option shall have
been exercised as set forth hereinabove) deliver to the Holder a certificate(s)
for the Shares containing such legends with respect to transferability as
required by applicable statutes, rules and regulations, together with a newly
executed Option containing the same date, terms and conditions of this Option
and governing the purchase of the balance remaining of the Shares purchasable
hereunder.
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE UPON THE PRIVATE
PLACEMENT EXEMPTION CONTAINED IN SECTION 4(2) OF THE SECURITIES ACT OF 1933 AND
REGULATION D PROMULGATED THEREUNDER AND IN RELIANCE UPON PARAGRAPH (13) OF CODE
SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973. THESE SECURITIES MAY NOT
BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL
FOR THE COMPANY, IS EXEMPT UNDER APPLICABLE FEDERAL OR STATE SECURITIES LAWS OR
PURSUANT TO AN EFFECTIVE REGISTRATION UNDER FEDERAL OR STATE SECURITIES LAWS OR
IS OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF CODE
SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AND MAY NOT BE SOLD OR
TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS
2
EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.
This Option is subject to the following terms and conditions:
1. Exercise of Option. This Option, except as otherwise
provided herein, may be exercised at any time after the date set forth
hereinbelow and prior to 5:00 P.M., Canton, Georgia time on the Exercise
Termination Date, but not thereafter, in whole or in part, from time to time,
as to all or any part of the number of Shares then subject thereto.
2. Covenants of the Company. The Company covenants and
agrees as follows:
(a) all Shares issued upon the exercise of this
Option, and full payment therefor, will be duly authorized, validly issued,
fully paid and non-assessable and free from all taxes, liens and charges with
respect to their issuance.
(b) at all times prior to the Exercise
Termination Date, the Company will have authorized and reserved a sufficient
number of Shares to provide for the exercise of this Option.
3. Adjustment of Shares and Option Price. The number of
Shares subject to issuance upon exercise of this Option and the Option Price
shall be subject to adjustment from time to time in accordance with the
following provisions:
(a) If the Company shall subdivide its
outstanding Shares into a greater number of shares or combine its outstanding
Shares into a lesser number of shares, the number of Shares subject to issuance
upon exercise of this Option (and not previously exercised) shall be adjusted
proportionately. That is, the number of Shares subject to issuance upon
exercise of this Option shall be multiplied by a fraction of which the
denominator is the number of Shares outstanding immediately prior to the
subdivision or combination and the numerator of which is the number of Shares
outstanding immediately after the subdivision or combination. Upon a
subdivision or combination of Shares, the Option Price shall be adjusted by
making the following calculation: (i) the number of Shares subject to issuance
by exercise of this Option prior to the subdivision or combination shall be
multiplied by the Option Price in effect just prior to the subdivision or
combination; and (ii) the number of Shares subject to issuance by exercise of
this Option after the subdivision or combination shall be divided into the
result of the computation in (i) above.
(b) If the Company declares and pays a dividend
upon its Shares payable in additional Shares, the number of Shares subject to
issuance upon exercise of this Option (and not
- 2 -
3
previously exercised) and the Option Price shall be adjusted by treating the
stock dividend as a stock split in accordance with the provisions of
subparagraph (a) above.
(c) If the Company effects any reorganization or
reclassification of its Shares (other than as provided for in subparagraph (a)
and (b) above), or any consolidation or merger of the Company with another
entity, or any sale of all or substantially all of the Company's assets which
results in shareholders becoming entitled to receive any securities or property
other than the Shares of the Company, appropriate adjustment or provision (as
determined by agreement of the Company or any successor entity and the Holder)
shall be made with respect to the rights and interests of the Holder so that
all of the provisions of this Option shall thereafter be applicable, as nearly
as may be, in relation to any securities or property thereafter deliverable
upon the exercise of this Option.
(d) No adjustment to the Option Price or the
number of Shares subject to issuance upon exercise of this Option shall be made
under any of the following circumstances: (i) the sale of any of the Company's
securities in an arms-length transaction at a price which has been approved by
the Company's Board of Directors; or (ii) the issuance or exercise of any stock
options, stock purchase warrants, or common stock issued pursuant to conversion
rights attached to any securities issued by the Company which have been
approved by the Company's Board of Directors.
(e) If any event occurs as to which the other
provisions of this Paragraph 3 are not strictly applicable, or, if strict
application would not protect the number of Shares receivable by Holder upon
exercise of this Option in accordance with the intent of these provisions, the
Company's Board of Directors shall adjust the application of these provisions
in accordance with their intent so as to reasonably protect the rights of the
Holder hereunder.
(f) The Company shall not be required to issue a
fraction of a Share upon exercise of this Option. If any fraction of a Share
would, except for the provision of this subparagraph, be issuable upon exercise
of this Option, the Company will: (i) if the fraction of a Share otherwise
issuable is equal to or less than one-half, round down and issue to the Holder
only the largest whole number of Shares to which the Holder is otherwise
entitled; or (ii) if the fraction of a Share otherwise issuable is greater than
one-half, round up and issue to the Holder one full Share in addition to the
largest whole number of Shares to which the Holder is otherwise entitled.
(g) Upon any adjustment of the Option Price and
any increase or decrease in the number of Shares issuable upon exercise of this
Option, then, and in each such case, the Company, within
- 3 -
4
thirty days thereafter, shall give written notice thereof to the Holder which
notice shall state the Option Price as adjusted and the increased or decreased
number of Shares, setting forth in reasonable detail the method of calculation
of each.
4. No Right as Shareholder. Nothing contained in this
Option shall be construed as conferring upon the Holder any of the rights of a
shareholder of the Company.
5. Investment Representations. The Holder, by
acceptance of this Option, hereby represents, acknowledges and agrees as
follows:
(a) that the Holder is acquiring this Option and
the Shares issuable upon exercise of this Option for his own account, for
investment purposes only and not with a view to sale or distribution thereof,
in whole or in part;
(b) that neither this Option nor the Shares
issuable upon exercise of this option have been registered under the Securities
Act of 1933, as amended, or any applicable state securities or Blue Sky laws
(collectively the "Acts");
(c) that the Holder shall not sell, transfer or
otherwise dispose of this Option (except as otherwise provided in this Option)
or the Shares issuable upon exercise of this Option, unless the Holder delivers
to the Company an opinion, addressed to the Company, by counsel selected by the
Holder and acceptable to the Company and its counsel, in form and substance
satisfactory to the Company and its counsel, to the effect that the sale,
transfer or other disposition of the Shares can be effected without
registration and in compliance with the Acts, or that exemption from the Acts
are available for such sale, transfer or other disposition. Any certificate
for the Shares issued upon exercise of this Option shall bear such legends
describing the foregoing restrictions;
(d) that the Holder has such knowledge and
experience in financial and business matters that he is capable of evaluating
the merits and risks of an investment in the Shares issuable upon exercise of
this Option;
(e) the Holder has been given the opportunity to
inquire of the officers and directors of the Company, as well as full and
complete access to all documents, books and records concerning the business of
the Company, its financial status, current circumstances, and future prospects
of the Company;
(f) all other relevant information regarding the
Company has been made available to the Holder as deemed necessary for the
Holder to make an informed investment decision; and
- 4 -
5
(g) the Holder can bear the economic risks of an
investment in the Shares issuable upon exercise of this Option as the Shares
are not freely transferable and there is not presently any public market for
the Shares of the Company.
The foregoing terms and provisions of this Paragraph 5 are
true and correct as of the date hereof, and shall be true and correct as of any
time the Holder shall exercise this Option and on the date of such purchase,
and shall survive any such purchase or the termination or expiration of this
Option.
6. Transfer Restrictions. The Holder may not transfer
this Option except by will or the laws of descent and distribution. This Option
shall not be otherwise transferable, assigned, pledged, hypothecated or
disposed of in any way, whether by operation of law or otherwise, and shall be
exercisable during the Holder's lifetime only by the Holder or his guardian or
legal representative.
7. Required Exercise or Termination. If the Company (or
its shareholders, as the case may be) shall propose to sell or exchange either
(i) all or in excess of 50% of the outstanding Shares of the Company or (ii)
all or substantially all of the assets of the Company, then the Company shall
have the right, exercisable in its sole discretion by notice to the Holder, to
require the Holder to purchase, within ten days from the date of such notice,
all or any portion of the Shares which are subject to this Option pursuant to
the other terms and conditions hereof, and this Option shall terminate as to
any balance remaining of the Shares as of the eleventh day from the date of
such notice from the Company to the Holder.
8. Miscellaneous Provisions.
(a) Any notice or communication to be given
pursuant to this Option shall be in writing and shall be delivered in person or
by certified mail, return receipt requested, in the United States Mail, postage
prepaid. Notices to the Company shall be addressed to the Company's principal
office. Notice to the Holder shall be addressed to the Holder's address as
reflected in the records of the Company. Notices shall be effective upon
delivery in person, or if mailed at midnight on the third business day after
mailing.
(b) The terms of this Option shall be binding
upon and inure to the benefit of the parties hereto and their legal
representative, any successors and permitted assigns.
(c) This Option shall be governed by and
construed in accordance with the laws of the State of Georgia.
(d) The headings contained herein are for
convenience and reference only and are not intended to define,
- 5 -
6
limit or describe the scope or intent of any of the provisions of this Option.
(e) In the event that any one or more of the
provisions contained in this Option shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Option
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
(f) This Option may be amended only by an
instrument in writing executed by the party against whom enforcement of the
amendment is sought.
IN WITNESS WHEREOF, the Company has caused this Option to be
signed by its duly authorized officers and its corporate seal to be affixed
hereto this ____ day of ____________, 1995.
Security Bancorp, Inc.
By:
----------------------------------------
President
Attest:
----------------------------------------
Secretary
[CORPORATE SEAL]
Accepted and Agreed
to by the Holder:
-------------------------------------------
--------------------------
- 6 -
7
DIRECTOR SUBSCRIPTION FORM
(To Be Executed Upon Exercise Of Option)
To: Security Bancorp, Inc.
The undersigned hereby exercises the right to purchase __________
shares of Common Stock (the "Shares") covered by the attached Option in
accordance with the terms and conditions thereof, and herewith makes full
payment of the aggregate Option Price of $__________ for such Shares. The
undersigned hereby directs that the certificate(s) for such Shares be issued in
the name of, and delivered to ______________________ whose address is
_____________________________________________. If the number of Shares so
purchased shall not be all of the Shares purchasable under such Option, a new
Option for the balance remaining of the Shares purchasable thereunder shall be
issued in the name of and delivered to the undersigned at the address shown
below.
This ____ day of __________.
-------------------------------------------
(Signature must conform in all respects to
name of Holder as specified on the face of
the Option)
Signature Guaranteed By:
-------------------------------------------
Street Address
--------------------------------
Commercial Bank or Member
Firm of a Stock Exchange
-------------------------------------------
City, State, Zip Code
- 7 -
